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CO-SEN GOP Candidate Jane Norton: Social Security 'Has Turned Into A Ponzi Scheme' (VIDEO)
Colorado senate candidate Jane Norton (R)
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Former Colorado Lt. Gov. Jane Norton, a candidate for the Republican nomination for Senate, called Social Security a "Ponzi scheme" at a recent public event.
Appearing at a Tea Party-hosted Republican candidate forum on Tuesday, Norton was asked to name federal programs that she thought were unconstitutional, under the scope of the federal government's enumerated powers, and also whether it was constitutionally permissible for the government to run the Social Security program as it exists now, with the government controlling the money.
"The federal government is fundamentally out of control," Norton answered. "They are seizing control of things like car companies, banks, insurance companies. They're encroaching in areas of education, of the EPA and its endangerment finding, circumventing the rule of law, circumventing legislative processes. They are absolutely out of control. With regard to Social Security, it has turned into a Ponzi scheme. The money that people pay into it should be there for when they are ready to retire."
We asked Norton press secretary Nate Strauch whether the candidate stood by her description, which seemed to imply that there was something crooked about Social Security. "She didn't imply that there was anything crooked about it. She said it's set up the same way a Ponzi scheme is," said Strauch, "which is new investors being used to pay old investors until the money runs out, and of course that's what's happening."
In the TPM Poll Average, Norton currently has a lead of 45.3%-38.0% over incumbent Democratic Sen. Michael Bennet, who was appointed to the seat in January 2009.
Here's the video, recorded by a Colorado Democratic Party tracker:
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The Commenter Formerly Known as NCSteve
March 11, 2010 10:52 AM
The Palinization of the Republican Party continues apace.
"Hi! I'm dumber than a box of hammers. If you're dumber than a box of hammers too and think the country would be better off run by people as dumb as you are, vote for me!"
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Lono65
March 11, 2010 11:37 AM in reply to The Commenter Formerly Known as NCSteve
Precisely.
She called it a Ponzi scheme, but didn't imply that there was anything crooked about it. Wait...what? That's kinda like calling a guy a child molester, but in a good way.
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Rick Jones
March 11, 2010 11:50 AM in reply to The Commenter Formerly Known as NCSteve
Uh, she looks kinda nice and I like the way her lips and mouth move and all when she talks. And I don't understand any of this shit anyway and I'm too lazy to learn about it or even pay much attention. So, sure, I'll vote for her. I mean, what the hell. right. They're all the same.
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Liberal Jesus
March 11, 2010 12:19 PM in reply to The Commenter Formerly Known as NCSteve
"I'm not saying your mother is a whore, I'm just saying she has sex for money!" Good Lord how stupid are the people of Colorado that this ignorant moron is even considered senate material, let alone in the lead!
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bluemeanie
March 11, 2010 1:38 PM in reply to The Commenter Formerly Known as NCSteve
When exactly did Social Security turn into a Ponzi scheme? Does Ms. Norton have a specific date in mind? Oh, yeah, it was when that awful socialist Obama took office.
Yes, lady, the money should be there. It IS there. No, it's not your specific dollar bill with your little smiley face in the lower right hand corner. But it's there.
Boy, we sure don't want that evil out of control federal government running Social Security. What we should do is hand the keys over to the guys that operated REAL ponzi schemes. Because that's, you know, freedom and liberty and stuff.
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GOPinNYC
March 11, 2010 3:05 PM in reply to bluemeanie
Everyone knows the date was August 14, 1935.
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bluemeanie
March 11, 2010 4:02 PM in reply to GOPinNYC
Apparently not Ms. Norton.
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kunda311
March 11, 2010 2:34 PM in reply to The Commenter Formerly Known as NCSteve
I can just hear Jon Stewart ripping this dumb bitch in his exaggerated Jersey accent: "I'm not calling you a crook, I'm just saying you do all the things that crooks do." These people are not dumb, they're a bunch of dishonest fucks.
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KeithL
March 11, 2010 7:11 PM in reply to The Commenter Formerly Known as NCSteve
You have to think of her teabagging audience. Eeeww! What a mental picture! THEY are dumber that dirt. She probably wouldn't sound so blatantly stupid if she was talking to the local Chamber of Commerce.
In that case, she'd probably sport an eyepatch, a parrot on her shoulder and roll her Aaarrrrrrghs a lot. Whatever the rubes want to hear!
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mike from Arlington
March 11, 2010 10:55 AM
Well gee, every aspect of our global economy is a ponzi scheme if you think like these people. If people stop buying into any piece of it, that part will collapse.
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nedbalzer
March 11, 2010 12:17 PM in reply to mike from Arlington
Yep. Any kind of insurance is a ponzi scheme -- premiums paid by some people are used to pay off others.
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Tom Dibble
March 11, 2010 3:03 PM in reply to mike from Arlington
The problem is that they are taking one aspect of a Ponzi Scheme (that one person pays for services for another with the expectation of someone else doing the same for them) and saying that is the defining characteristic of such.
No, it is not.
The defining characteristics of a Ponzi Scheme are:
1. Each person expects to receive in benefits from multiple other people, more than paying for their investment (ie, why this is called a "pyramid scheme").
2. There are a finite number of possible future participants.
It is the latter - a finite number of participants - which is the main difference here. Granted, I don't see Social Secutiry still being around in its current form a thousand years from now, but when it is one generation paying for another generation, there is not a natural limit to the size of the scheme. Whereas, in a Ponzi scheme there are a finite number of people who are able to buy into the scheme and willing to risk the scheme not paying them back (and, since such schemes are illegal, willing to risk jailtime when the whole thing comes crashing down).
The one characteristic they choose to hang on - people helping others in hope of being helped in return - used to be an admirable trait. Whole libraries of poetry, novels, and films exists regailing such "schemes". It also tends to cover, as said by others, everything from the global financial markets, the stock markets, insurance trading, and just about every other multi-person organization our species has devised.
Obviously, it's all Ponzi Schemes on top of Ponzi Schemes. All the way down.
Or, maybe, that word just doesn't mean what Ms Norton thinks it does.
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tchamp77
March 12, 2010 12:48 PM in reply to Tom Dibble
Isn't the difference that the people running a Ponzi scheme do so to enrich themselves at the expense of all others, while Social Security is really just a assigning current workers' tax revenues to current beneficiaries?
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zonk
March 11, 2010 11:05 AM
Sowell goes mainstream.
This shouldn't be surprising - it's in vogue among the Paultard brigades and has long been a too clever by half assessment from conservative icon Thomas Sowell.
Sowell is the go to guy for conservatives who like to think they're "very serious people" because he actually does have a bachelors and masters in economics, and fwiw, isn't a talking points spewing robot.
Problem is, most conservatives who reference the Sowell argument on Social Security do so only to latch onto little nuggets as talking points.
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AJM
March 11, 2010 12:59 PM in reply to zonk
The first generation to support their elders by Social Security agreed to lend the money if they would be paid back later. They made the choice to do so from a much lower standard of living than future generations will have. Yes, there will be fewer workers for each retiree but there will be much higher levels of productivity -- so proportionally the future payers will suffer a much reduced percentage draw on the standard of living AND will ave the same floor to their own future economic well-being.
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madmatt
March 11, 2010 11:08 AM
Well if the money isn't their for social security in US Bonds, then we don't have to pay off federal debt either!
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ETSpoon
March 11, 2010 11:13 AM
This woman is a Boomer. She is only six years away from receiving Social Security benefits if she retires at age 62.
What she's singing is the tea bagger song, "I've got mine, screw you."
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sheerahkahn
March 11, 2010 11:26 AM in reply to ETSpoon
That is so true.
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rb6
March 11, 2010 11:35 AM in reply to ETSpoon
Maybe some enterprising reporter will ask her whether she plans to forego Social Security and not enroll in Medicare?
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AJM
March 11, 2010 1:02 PM in reply to rb6
She should have been forced to retire due to medical necessity without Social Security in March of 2009.
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DownriverDem
March 11, 2010 12:52 PM in reply to ETSpoon
She also is saying to us Baby Boomers: Die!!!!!
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hey norm
March 11, 2010 11:15 AM
The founding fathers did a brilliant job setting up the republic...except that it seems the system gets progressivly dumber. Can you imagine any of these idiots at the constitutional convention? I don't know what was in the water back then but we could use some now.
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A Missouri voter
March 11, 2010 11:39 AM in reply to hey norm
Its not what is in the water. It is what is in the air (or rather the air-waves). The founders were not contending with Fox news.
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AJM
March 11, 2010 1:03 PM in reply to hey norm
Education.
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Scarce
March 11, 2010 11:18 AM
Amusingly Norton didn't even win the teapartiers straw poll.
http://www.publicbroadcasting.net/kunc/news.newsmain/article/1/0/1621158/Regional/Norton..McInnis.Finish.Behind.other.Candidates.During.Tea.Party.Polling
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bwthemoose
March 11, 2010 11:23 AM
This is straight from the Gospel according to Grover (Norquist). He has been braying thsi lie for the last 10 years, and he gave a nearly identical description back in 2003-- when he described SS as a "Ponzi scheme"-- this was the same interview in which he equated estate taxes to the Holocaust.
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slb
March 11, 2010 12:09 PM in reply to bwthemoose
That Social Security is a Ponzi scheme has been an article of faith on the right for as long as I can remember, and that's from long before Grover Norquist appeared on the national scene. In fact, that's how I first heard the term "Ponzi scheme."
Not that I know of anyone who described it that way that was willing to forego their share of it...
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AJM
March 11, 2010 1:07 PM in reply to slb
The first generation gave money to their elders on the promise of having that money paid back to them from the next generation who would have their money paid back to them from the next generation.
Puts an economic floor under everyone's old age.
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Kyle H
March 11, 2010 1:49 PM in reply to slb
I will gladly forego any Social Security I will receive later if I can keep my OASDI (and my employer's matching contribution.) Heck, I'll even pay a reduced amount, say 25%, of my current OASDI into the system anyway just to draw it to a nice standstill.
But that's not really on the table, so whatever.
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dustbunny44
March 11, 2010 4:00 PM in reply to slb
You know what else (!) is a ponzi scheme? The stock market. Stocks are fundamentally worthless - if we all try to sell them, the value will go to zero in minutes.
And banks - there's another one. Let's all get our money out of First Colorado Bank and see how far we get.
Can someone get Jane to go on record calling banks and the stock market ponzi schemes? We could sure use her help.
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kth
March 11, 2010 11:27 AM
That whole paragraph is a miasma of stupid, not just the part about Social Security. The only way the federal government has taken a more active role in local education is (under *Bush's* No Child Left Behind act) is to give localities more money if they agree to the testing regime. And the alternative to "taking over" the banks, auto companies, etc., was for them to go completely belly-up (Norton probably would have favored just bailing them out with even fewer strings attached than was the case).
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slb
March 11, 2010 12:31 PM in reply to kth
Not only that, but apart from the bailouts to a few select big guys (which were hardly a "takeover," or those banks would be using the bailout funds to lend out rather than for executive bonuses), the actual takeovers of smaller failing banks by the FDIC is part of the insurance arrangement.
In exchange for being able to offer depositors the assurance of the safety of their money (which allows them to pay lower interest rates than they might otherwise have to to attract money), the banks pay an insurance premium and also submit themselves to oversight and periodic examinations by the insuring agency. If their balance sheets fall below certain prescribed minimums, putting them at risk of failure, the FDIC assumes control, pays off the insured depositors, and sells off the assets as partial reimbursement to the insurance fund. This is not new; it has been the way the federal system has worked since the 1930s. And for the most part, the system works pretty well. There has been more than a score of such seizures just this year, and it has barely caused a ripple on the national consciousness.
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CranialRectalLoopback
March 11, 2010 11:29 AM
No more so than the Pentagon budget. We never get any return on that investment. We just keep throwing money at it in the hopes that we will be defended from evil-doers.
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FreeRider
March 11, 2010 11:29 AM
The fact that this nutbag was elected to statewide office gives Coloradans a reason to hang their heads in shame.
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A Missouri voter
March 11, 2010 11:41 AM in reply to FreeRider
It really will be a shame, too, if Sen Bennet is thrown over for this chump. We should all be sending contributions to Bennet, because he is showing real liberal conviction (calling for the Public Option to be restored through the reconciliation side-car) and we should reward good behavior by elected democrats.
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nowhereman
March 11, 2010 11:44 AM in reply to FreeRider
Hey, believe me, we the sane people of Colorado are kinda used to living in a bi-polar state. We have dems as Gov and both senators and our state legislature is dem controlled. Norton could change that as there are just enough wackadoodles here to shift an election if the dems and youth don't turn out. Westerners really do think that divided government is good government. They also hate the feds. Independents are critical out here.
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DownriverDem
March 11, 2010 12:55 PM in reply to nowhereman
How would they feel if folks like her did away with Social Security? Who votes for folks like this? If they are not rich, they are insanely stupid.
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psyclone
March 11, 2010 11:30 AM
"She didn't imply that there was anything crooked about it. She said it's set up the same way a Ponzi scheme is,"
What a chickenshit. Ponzi schemes are by definition FRAUD and therefore crooked. Nate is too scared to go on record saying what he and his candidate believe.
A smart Dem would run hard with this.....
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CityGuy
March 11, 2010 4:32 PM in reply to psyclone
The more that Rethugs dump on Social Security, the brighter the November elections look for Democrats.
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Sailormarlowe
March 11, 2010 11:49 AM
Miss Jane, she makes attractive candidate, and even peoples who don't always agree with her on every issue, they all admit she brings the right stuff to the table.
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FreeRider
March 11, 2010 11:53 AM in reply to Sailormarlowe
The "salty old sailor" speaks. Going snorkeling?
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Marinus van der Lubbe
March 11, 2010 12:30 PM in reply to FreeRider
He's a total ass snorkeler, sailorFELCHqueen....or wishes he lived in Todd Palin's urethra.
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AJM
March 11, 2010 1:12 PM in reply to Sailormarlowe
Palin also looks hot. How did that work out for you?
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Napoleon
March 11, 2010 11:51 AM
I have been hearing this line from hard core Republicans and conservatives since the late 70's when I first started voting. The thing is back then most of them didn't say it out loud to many if they didn't seem to think it was safe, but for a very long time there has been a good number of people that believe that and I think what you are seeing is they think this is going to be their moment when the black guy in the WH implodes and allows them back into power to enact the final gutting of the New Deal. Why do you think Ryan ever got to be allowed to have his budget see the light of day?
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davcbr
March 11, 2010 12:11 PM
"The money that people pay into it should be there for when they are ready to retire"
And I know it's not there, because my frioends and I have stolen it!
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Matt Jones
March 11, 2010 12:46 PM in reply to davcbr
More importantly, there's an obvious but unspoken corollary: if you live "too long" while collecting benefits, you'll RUN OUT. Apparently we're back to the Republican HCR plan - "die quickly".
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BBpdx
March 11, 2010 12:36 PM
It is basically a ponzi scheme, but one where the new "marks" are guaranteed to be there by law, so it can be managed to run smoothly. But in its mechanics, it's much like a ponzi scheme.
But the real problem with entitlement programs is that Congress has been spending all the surplus on other stuff instead of protecting it (ala Gore's "lockbox").
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DownriverDem
March 11, 2010 12:50 PM in reply to BBpdx
The real problem is what the hell do they expect all the Baby Boomers to do? DIE!!!!
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AJM
March 11, 2010 1:17 PM in reply to BBpdx
A Ponzi scheme funnels PART of the Money from new investors to PARTIALLY pay off the old investors while diverting the rest as ill gotten gains.
In Social Security the new investors lend money to the government to set a floor under the standard of living of their elders in return for having the same down for them. ALL the money is used for the purpose intended: making sure that ALL participants have an economic floor under their old age.
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John
March 11, 2010 5:38 PM in reply to AJM
I would love to see SS work that way, but it does not. There is ZERO means-testing. It is not an insurance program (providing payments to only those who need it) -- the government has determined that it gets more votes by turning it into an entitlement for ALL people over 65 (or 62 or 68 depending on year born and circumstances). If it was insurance, it could work; as a pension replacement entitlement it exhibits many qualities of a Ponzi Scheme.
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AJM
March 11, 2010 8:57 PM in reply to John
I said floor not safety net. As a floor you can choose to build on it or not -- you paid for it when you paid the generation before you. And you live at higher standard of living than that generation did when they paid for the generation before them.
If it were a safety net, then means testing would be appropriate but since you are essentially being paid back money you lent means testing is not appropriate.
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John
March 11, 2010 9:18 PM in reply to AJM
http://www.nytimes.com/2010/03/12/business/global/12pension.html?ref=world
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AJM
March 11, 2010 9:22 PM in reply to John
Um, are you aluding to the fact that many are now taking Social Security early because Bush broke the economy by failing to regulate the financial industry and broke the Federal budget by conducting wars on phony pretexts?
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John
March 11, 2010 10:19 PM in reply to AJM
um, no. I was pointing to the large, unfunded, and largely undisclosed liabilities that existed before Bush, exist today and will be tragic in the future
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rb6
March 11, 2010 3:14 PM in reply to BBpdx
You mean because Bush with Alan Greenspan's blessing gave the SS surplus away as a tax cut? I don't guess Norton would be keen about reversing that give away, do you?
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DownriverDem
March 11, 2010 12:48 PM
As a Baby Boomer, I am sick and tired of being jerked around on Social Security. I have worked my whole adult life and if the GOP thinks Baby Boomers are just going to take it, they are mistaken. As far as I'm concerned, the message of the GOP to Baby Boomers everywhere: JUST DIE!!!!!!
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MarciaJ720
March 11, 2010 12:59 PM
Democrats need to put the fear into all of these older folks who are currently collecting Social Security and having their medical bills paid for by Medicare (i.e. all Government, taxpayer funded benefits) that Republicans want to take it ALL away.
Seriously, these older folks who vote Republican are voting against their own interests and are too dumb and selfish to realize it.
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mans_best_friend
March 11, 2010 1:08 PM in reply to MarciaJ720
If people were informed and voted their true interests, Republicans would get about 1% of the vote. Why do you think their every public statement is filled with lies? Their whole electoral strategy is to appeal to people who don't know better.
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Given Up
March 11, 2010 1:40 PM in reply to mans_best_friend
What's really terrifying is that there appear to be enough people who don't know enough to make this a winning strategy.
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AJM
March 11, 2010 1:24 PM in reply to MarciaJ720
Many of the Republican proposals offer to grandfather the older folks in to Social Security if they vote to screw the young folks by removing their future access to Social Security.
They appeal to young folks by several lies:
1) Social Security won't be there for you
2) It will cost you to much (with the benefit from productivity increase distributed fairly all future generations will have a far higher standard of living than their elders) and
3 (the current laugh line) markets are just as secure.
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LAB
March 11, 2010 1:01 PM
I am truly frightened for this country. If the likes of this woman and others like her are elected, we will become a more divided nation than ever. Oh, and she's nuts.
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The Naturalist's Attitude
March 11, 2010 1:48 PM
Has anyone else noticed that the Social Security Administration's website actually has a relatively detailed history and description of Ponzi schemes? That seems worth nothing.
http://web.archive.org/web/20041001-20051231re_/http://www.ssa.gov/history/ponzi.html
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KenK
March 11, 2010 1:58 PM
On some level I agree Social Security is a ponzi scheme. But let's look at how it became one. For decades the government (under both Republicans & Democrats) have borrowed (stolen) the assets of the Social Security Trust Fund and used the money to pretend that the deficits were smaller than they were. Now the trust fund is a pile of government IOUs. The IOUs are coming due and SURPRISE!, they complain about having to pay off the loan. Kinda sounds like the irresponsible mortgages they like to rail against. At 59 years old I have been paying into the fund since I was 16 years old. Since my mid 20's I was paying the maximum. That adds up to a nice chunk of change. If it had been invested responsibly (I am not promoting privatization) there would be a large pool of money for benefits. It's not an entitlement. I just want a fair ROI for decades of saving for my future. Given that Wall Street stole half my savings last year I need Social Security more than ever.
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George C
March 11, 2010 2:34 PM in reply to KenK
Ken --
See my comment below. While I appreciate that you've been paying into SS since your youth (as have I) and at the maximum since you were 20 (as have I), what you paid is a pittance compared with what you'll collect. I think I read somewhere that most recipients receive their total contributions in fewer than 10 years. Where does the rest come from?
Plus, with all due respect, it is an entitlement in the same sense that Medicare is an entitlement: you're entitled to it because you're a citizen, whether you've received all of your contributions or not.
Finally, there's no "return on investment" with SS because the money isn't "invested". As you did, you're free to invest however much you can, but if the market tanks (as it did) you suffer the consequences. Not so with SS, Bush admin desires to the contrary notwithstanding. SS was never intended to be a retirement plan; it's an entitlement to make sure old people don't starve to death. Ponzi scheme my ass.
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George C
March 11, 2010 2:01 PM
I don't understand. First, she didn't say SS was set up "like a Ponzi scheme". According to the quote, she said, "With regard to Social Security, it has turned into a Ponzi scheme."
Second, a Ponzi scheme is not an arrangement in which current inflow is used for prior obligations. That can describe virtually any business in America today. Rather, it is a "scheme" because the essence of the understanding -- i.e., that funds are being "invested" and held pursuant to a fiduciary arrangement -- is totally false. As with Madoff, the money was never invested -- it was all used for the benefit of manager. If anyone cashed in their funds, the proceeds were paid from income because there were no funds.
Under what delusional nightmare does this describe social security? People pay in, but no-one is told that the benefits they receive are held in some kind of fund. Rather some people pay in and others take out. The Gov't stands behind the entire arrangement whether there's money in the "fund" or not. While we arguably would have been better off with Gore's "lock box", it's irrelevant. Anyway, most SS recipients receive far more in benefits than they ever paid. The system could never work if SS could pay benefits only from a particular recipient's contributions.
This woman makes Beck look like a genius.
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jsdc007
March 11, 2010 2:10 PM
This woman will say anything to appeal to the right wing teabaggers. So, there are no limits to the nonsense she'll spout. She's also a major anti-abortion nut job.
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Official A
March 11, 2010 2:14 PM
Richie Cunningham's parents are gonna be really mad at the Ponz if they don't get their Social Security checks.
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rawresolve
March 11, 2010 2:36 PM
If "social security" she means "Wall Street" I agree.
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theCleverBulldog
March 11, 2010 2:46 PM
Reading the idiotic posts here it is apparent that you people have no clue how SS works, how a Ponzi scheme works, and why they are essentially the same. Ponzi schemes attracted new investors by paying off huge returns to existing investors, while stealing a large portion for the organizer. It works as long as there is an ever increasing number of new investors to pump in cash. When the number of new investors declines, it collapses.
SS works by paying an ever increasing amount of money to retired workers collected from current workers, while keeping a nice portion for the government. It works as long as there is an ever increasing number of workers willing to pay ever increasing taxes to support it.
The problem for SS is that the pool of workers is shrinking, so they will be forced to pay higher and higher rates to sustain the level of the retiree payouts. One retiree being supported by ten workers works, ten retirees being supported by one worker does not. At some point the future worker will demand an end to this, and your 'safe' pension will vanish instantly.
For those who are fundamentally slow, like Al Gore, and want to talk about the trust fund and the 'lock box', you should know that all the money has been spent already. There is no trust fund, just a pile of worthless IOU's the government wrote to itself. Those tbills must be paid off by future taxes, just as their interest payments are paid by taxes. In the hands of the government they have no value, if you doubt that, write an IOU to yourself and then go to the bank and try to get a loan based on that IOU. See if they think it is an asset.
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George C
March 11, 2010 3:07 PM in reply to theCleverBulldog
There's no point arguing about this, because it's specious. As others have pointed out above, a Ponzi scheme constitutes criminal fraud; no-one but Repubs suggest that SS falls in that category. What does "keeping a nice portion for the gov't" mean? That it goes back into general revenues? Do you really see that as essentially the same as Madoff keeping money for himself?
How were recipients paid when SS first started? Weren't they paid from general revenues? Does that matter?
I also think you miss several fairly obvious alternatives to the current SS revenue crunch: 1) impose the SS tax on all earned income, i.e., abandon the arbitrary limit that basically shelters the wealthiest wage earners from paying the same percentage as the middle class; and 2) impose the SS tax on capital gains and similar investment income. What's wrong with that?
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theCleverBulldog
March 11, 2010 3:36 PM in reply to George C
The government setting up a 'retirement' plan where the set the retirement age above the average life expectancy sounds like they had fraud on their minds in the first place. To 'fix' the system now we can just raise the benefit age to 80, or 90. That should solve the problem of paying out too much.
As to your 'solutions', the tax is capped because the benefits are capped. Do you think people would pay hundreds of thousands per year for a pension that pays 12k per year? Does that sound fair? I know, you democrats don't care about fair, everything you do is designed to screw one class to buy votes from another. But you will see high paying jobs leave for greener pastures, just as they have left other high tax areas.
The same is true with capital gains. Adding SS tax to cap gains would double the rate, making many investments unprofitable. My entire income comes from capital gains. I do not need to live here, if it becomes unfavorable to do so I will leave, as will others. Or else I and others will simply quit investing and just put the money in the bank. If you tax investing to make it unattractive, people will stop doing it. Then companies won't be able to get capital, they won't be able to expand, or create jobs. New companies will not be created due to lack of venture capital, basically you will destroy the entire economy.
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George C
March 11, 2010 3:43 PM in reply to theCleverBulldog
Ah. "you democrats"? That puts everything into context.
If your party is really opposed to satisfying one segment to buy votes, get them to announce that they're going to cap SS benefits because old people are getting too much.
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theCleverBulldog
March 11, 2010 5:07 PM in reply to George C
so, you can refer to 'repubs' but calling lumping you in with 'democrats' is out of line?
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savefps
March 11, 2010 3:33 PM
SS is by definition a pryamid scheme. If I were to offer this type of plan to my employees I would go to jail. You should only get back what you paid plus interest earned from the investment product you purchased. SS allows the first to get everything at the expense of the later. Definition, that is a pryamid scheme.
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The Naturalist's Attitude
March 11, 2010 4:10 PM in reply to savefps
No. In a pyramid scheme (which, for the purposes of simplification, I'll treat as synonymous with a Ponzi scheme), one person (or entity) promises a percentage of returns for money invested, say 100%. If three people invest $100, the organizer of the scheme must pay the original three investors $200 each after an already specified amount of time. He or she does this by soliciting more investors (in this case 6) who each pay $100. The schemer then uses the money from the second group of investors to pay the first. It is easy to see how this scheme will collapse relatively quickly because it demands such a steep rate of increase in investors. Pretty soon, the scheme becomes so large that it either attracts the attention of the authorities or it collapses under its own weight. Madoff managed to run his scheme for years, but the financial collapse prompted a "run" by his investors and he suffered a liquidity crisis in which he was unable to sustain the rates of return he promised, and the money--poof!--disappeared. The sine qua non of the Ponzi or pyramid scheme is that profits are promised without any mechanism to insure them other than continual investment. Without a source of revenue other than investors, the scheme eventually goes bust. Social Security, on the other hand, makes no such fraudulent promises. Moreover, it relies on a stable relationship between money paid in and money paid out. This does not mean that the amount paid in will always EQUAL the amount paid out, but it is sufficient to have a relatively stable relationship between money going in and money going out, which is why Social Security is often referred to as a "pipe-line." It may be worth adding that Ponzi schemes, even the best laid, never last very long. Madoff, who managed to pull off the most successful financial fraud in history hardly measures up to the 75 years the Social Security Administration has been in existence. Please, peddle this non-sense elsewhere.
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theCleverBulldog
March 11, 2010 5:04 PM in reply to The Naturalist's Attitude
"profits are promised without any mechanism to insure them other than continual investment. Without a source of revenue other than investors, the scheme eventually goes bust. Social Security, on the other hand, makes no such fraudulent promises."
What mechanism to insure payments other than continual investment is present in the SS system? What happens when the number of workers dramatically decreases over time (as is the case)? How does your 'pipeline' work when there are more people collecting benefits than paying them?
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The Naturalist's Attitude
March 11, 2010 5:19 PM in reply to theCleverBulldog
I'm not arguing that Social Security doesn't have to confront challenges, I'm just saying it's different from a Ponzi or pyramid scheme, since there's no fraud involved and the goal is to balance money coming in and coming out. One solution to the problem you've alluded to (the decreasing number of workers paying into SS) is a more progressive tax system. In such a system, those who make more money than they know what to do with would have to invest that money to help ensure the social safety net. Other solutions involve a more responsible use of government revenues, such as a reformed health care system. If it were a Ponzi scheme, then the schemer (in this case the government, which, if you think about it, makes no sense and makes your argument look silly and tendentious) would skip town with all the money.
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matty
March 11, 2010 3:36 PM
It's amusing that people are so sensitive about the definition of the term "Ponzi scheme".
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savefps
March 11, 2010 4:21 PM in reply to matty
SS is a ponzi scheme. People are getting money for nothing. Their return is based on the time of entry to the program, not investment success. The earlier you entered the SS scheme the more you will receive. As a pryamid, current base feeds current recipients. The base is shrinking and the top is growing. Unless SS is tied to total net worth and/or age raised to at least 72, we will soon see a Madoff disaster times 100.
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The Naturalist's Attitude
March 11, 2010 4:41 PM in reply to savefps
This is simply untrue. I won't repeat what I wrote above, but the point remains that unlike a Ponzi scheme, SS makes no fraudulent promises to its investors. It is a social insurance system, transparently designed to insure a basic standard of living for the elderly. Unless we disagree about the moral obligation we have as a society to make certain that our oldest and most vulnerable citizens don't starve to death, I'm not sure what you could possibly be on about.
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theCleverBulldog
March 11, 2010 5:19 PM in reply to The Naturalist's Attitude
If as liberals now like to claim, that SS is not a pension plan for the worker but rather a tax to support the elderly, then: (1) Why do only workers pay it? (2)Why are benefits tied to the amount you earn? (3) Why do they account for your benefits accrued in annual statements? (4) Why do you have to work a specific number of years to be eligible? In short, in what way is it structured and administered differently from a pension plan?
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The Naturalist's Attitude
March 11, 2010 5:40 PM in reply to theCleverBulldog
Why does one exclude the other? Social Security is a social insurance program meant to alleviate suffering caused by old age, disability, and, historically, unemployment. Just because benefits and mechanisms of payment are not uniform doesn't mean it's the "same" as any old pension plan. And even if you simply want to consider it a pension plan, that says nothing about the benefits of having a government run plan that ensures people's retirement or well-being are not subject to the oscillations of the market.
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John
March 11, 2010 6:24 PM in reply to The Naturalist's Attitude
You refer to Social Security as an insurance program...but it is not (at least not anymore). If it were, it wouldn't be headed toward insolvency. If it is an insurance program, then means-test the recipients and only provide payments to those who need it. However, that isn't done, as the government has determined that it gets more votes by turning it into an entitlement for ALL people over 65 (or 62 or 68 depending on year born and circumstances). Older people vote, and they like entitlements. Younger people like entitlements, too, but don't vote as much.
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The Naturalist's Attitude
March 11, 2010 6:45 PM in reply to John
Let's get real--the United State's social safety net is not collapsing under the weight of elderly greed. European states, who are suffering from much sharper age-pyramid inversions, don't seem to have nearly as much trouble providing people with an adequate standard of living. If you're problem is people receiving government benefits, just come out and say so, but don't blame the fate of Social Security on a sense of entitlement as if that were the real problem.
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John
March 11, 2010 7:09 PM in reply to The Naturalist's Attitude
Didn't say it was collapsing due to elderly greed; it is collapsing because our elected representatives are choosing to ignore the problem until it is a crisis. Then it will be collapsing. The solution is clear -- raise the retirement age and/or curtail benefits. The best way to do that, IMO, is to have Social Security do what you say -- make sure people don't have to live in squalor and have at least a minimum amount of money. Make it means-tested and we can keep the safety net. I stand by my opinion about entitlements, though. Have a politician try to propose means-testing and watch the AARP reaction.
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acf_ma
March 11, 2010 4:24 PM
Seventy-Five years, and they're still fighting the thing. It's not a Ponzi scheme, it's a program designed to keep retirees from living in destitution. While I'm at it, it isn't your personal pension managed by the government, either.
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savefps
March 11, 2010 4:52 PM in reply to acf_ma
I have no pension neither should anybody else. Your retirement should be what you save and invest. My wife and I have been saving as if we weren't ever going to see SS. Every extra penny goes to the kid's 529s, personal savings, and 401(k)s.
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The Naturalist's Attitude
March 11, 2010 5:02 PM in reply to savefps
This is indeed sound investment strategy because we know that financial markets are always stable and never engender catastrophic consequences for the global economy. You must work in the industry, and if you don't, I'm sure there are many out there clamoring for the kind of air-tight advice you seem able to dispense.
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lousgirl84
March 11, 2010 7:04 PM in reply to The Naturalist's Attitude
You can always tell a troll = they love to tell other people how to live their lives. After all if savefps and his wife can save all their money, why can't everyone else.
Come on folks, pull yourselves up by your bootstraps - go get a job and stop living off of unemployment benefits and start saving all your money. ..... LOL
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savefps
March 11, 2010 4:53 PM in reply to acf_ma
I have no pension neither should anybody else. Your retirement should be what you save and invest. My wife and I have been saving as if we weren't ever going to see SS. Every extra penny goes to the kid's 529s, personal savings, and 401(k)s.
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John
March 11, 2010 5:48 PM in reply to acf_ma
If it is to avoid having retirees living in destitution...then means-test the recipients, based on assets or other income or some other measure. If we don't do that, we will just continue the generational transfer of wealth from the young to the old and push the existing Social Security to the brink of insolvency.
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texscubarat
March 11, 2010 4:40 PM
"They're encroaching in areas of education, of the EPA and its endangerment finding, circumventing the rule of law, circumventing legislative processes."
She's a bit too late to the party, that was the Bush era she is referring to. What a whack job!!! Typical repug!!!
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August 22, 2010 12:03 PM
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