Social Security 

Social Security is a scam.  How many times have you heard that Social Security is a Ponzi scheme, which as always is doomed to collapse, yet the taxpayers who are being fleeced simply hope there will be money there for them when they retire, rather than doing anything about this corrupt fraud.   

Every couple of years, CONgress announces a desperate need to fix Social Security, and a few months and many hearings later, CONgress proudly comes forth with new laws to fix Social Security for the next _[fill in the number here]___ decades.  Of course this fix, never seems to last much beyond the next election cycle, and the process is repeated. 

What is Social Security.  It is a tax, half of which is hidden. When you get your first paycheck, you angrily exclaim, ‘Who the heck is this Fica guy, and why is he getting 7.5% of my gross pay?!’  Welcome to the real world.  Now it is your turn to begin getting screwed by the federal government. 

Social Security takes 7.5% of your pay right out of your paycheck.  But wait, your employer matches this amount so in effect 15% of your pay is removed.  That employer contribution is money your employer already figured into the cost of your job position.  It could easily be money they would be paying you in a free market.  Instead, 15% of everything you earn goes into a Social Security "trust fund," for your future retirement.  Well, gosh that does not sound too bad.  Until that is, you realize that over the 20 – 40 years you work, that money will only earn an average 1.8% interest! Compared to six times as much if you invested that on your own, and compounded over that many years … you would have been a millionaire! 

It gets worse, that trust fund does not exist except for a fraction of a second.  Because, all that money immediately gets transferred into the federal government’s general fund, where of course it is spent (indeed, it is borrowed against by your CONgressmen = IOU's!).   

Now some people thought this was wrong, and went to the Supreme Court for relief.  Bad news, the black robes ruled this was not a trust fund, but simply another tax levied by CONgress.  They can do whatever they wish with this loot.  And CONgress is under no obligation to spend the money on what they stated was the intention when it was collected.

Social Security is a tax.  Nothing more.  Whether you get any return on this money, depends on there being money present in the future, and on CONgresses willingness to spend their limited budget on you.  I wouldn’t bank on it. 

Hence the Ponzi scheme.  When Social Security was enacted there were 16 taxpayers for every leech.   Now there are three taxpayers for every leech.  For Social Security to remain solvent the retirement age must be raised from 65, and the amount extracted from your pay, and matched by your employer must also be increased.  At some point, young workers knowing full well they are never going to see a dime of their stolen money will rebel.  So you old people better treat your kids well, or have your own savings … because it won’t be pretty when you get completely cut off.

From a libertarian perspective, while saving for your eventual retirement is very wise, it is not the business of government to compel such behavior.  From a practical manner, the only way to save Social Security is to privatize all of it.  Not just some crappy 2%, and even then, only to be invested in government approved markets.  No the best would be to give everyone their money back now and let them invest it. 

Lastly, the other nice thing about your own investment is when you die, you can pass your remaining wealth onto your family. 

Don't take my word for it.  Here is a message from your friendly neighborhood Social Security Administration:

Thank you for your inquiry.



Participation in the Social Security program is mandatory with respect to

the payment of Social Security taxes, regardless of the citizenship or place

of residence of either the employer or the employee.  Unless specifically

exempt by law, everyone working in the United States is required to pay

Social Security taxes on earnings from covered employment.  These earnings

are subject to Social Security tax without regard to the citizenship or

place of residence of either the employer or the employee.



The law provides an exemption only in very limited circumstances for members

of certain religious sects.  Individuals generally cannot voluntarily

withdraw from or terminate their participation in the Social Security

program. 



Similarly, people cannot withdraw the Social Security taxes that they have

already paid.  This is true regardless of the number of Social Security

credits earned or whether benefits are payable.  



The Social Security taxes that employees and employers pay on workers'

earnings are not placed in an individual worker's account, but are pooled in

special funds from which benefits are paid to eligible workers and their

families.  However, people will not receive benefits unless they voluntarily

apply for them at the time they become eligible.



The authority for the collection of taxes, including Social Security taxes,

is found in the Internal Revenue Code, not the Social Security Act.  (See

sections 3101(a) and 3102(a) of the Code.)  We suggest that you direct any

questions you may have about tax liability to the Internal Revenue Service

(IRS) by any of the following methods:



-- Calling their toll-free telephone number, 

1-800-829-1040; or

-- Calling or visiting any local IRS office; or

-- Writing to the national address of the IRS below:



Internal Revenue Service

1111 Constitution Avenue NW

Washington, D.C.  20224



Or



-- Accessing their Web site at the following Internet address:



http://www.irs.gov	

 

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