Why is social security/medicare considered a pay as you go program?

Discussion in 'Politics, Religion, Social Issues' started by Zombie Acorn, May 13, 2009.

  1. Zombie Acorn macrumors 65816

    Zombie Acorn

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    #1
    I keep hearing social security and medicare being referred to as "pay as you go", this seems a bit strange to me that the young today are paying for the old when the old have been pumping money into the system most of their adult lives. It seems to me that one generation would have had to get a free ride for this to be a pay as you go, or the government simply squandered the funds that were paid in by the first generation to use this system. :confused:

    Obviously these programs have received some news time lately as they could be in trouble of drying up soon. I don't think most young people expect them to be there when they retire so that is already a good safety net to getting rid of at least one of the programs.

    This is a system you pay into all of your life, why shouldn't you be able to keep your own money for retirement? In fact each person having their own retirement fund is the most efficient way to pay for this because birth rates might fluctuate. Thoughts?
     
  2. fivepoint macrumors 65816

    fivepoint

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    #2
    The average Social Security recipient receives something like twice the amount of money that they put into the system. Social Security, medicare, and the like are the world's biggest PONZI SCHEMES. Socialism at it's best, and most unsustainable.

    http://www.cnbc.com/id/28241636
    http://www.ocregister.com/articles/money-government-madoff-2260698-security-social
    http://en.wikipedia.org/wiki/Ponzi_scheme

    http://www.socialsecurity.org/daily/05-11-99.html
     
  3. leekohler macrumors G5

    leekohler

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    #3
    Really? I'd be interested to see proof. I'd also be interested to see how would would solve the problem of all our elderly being without social security.

    And the reason SS is in trouble is the same reason many companies' pension funds are in trouble- the government keeps dipping into it.
     
  4. leekohler macrumors G5

    leekohler

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    #4
    An Op-ed column? Where's the numbers for how much SS recipients are receiving? Are there any? And wouldn't that also be a result of inflation?

    Still waiting to see how you would handle the elderly on SS suddenly being without it.
     
  5. iGary Guest

    iGary

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    #5
    Duh, that's their problem. :rolleyes:
     
  6. leekohler macrumors G5

    leekohler

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    #6
    Oh- that's right. I hear there are some really nice deals on cardboard boxes.
     
  7. davidwarren macrumors 6502a

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    #7
    That's the problem, what started as a safety net has turned into an entitlement program. People forego retirement planning on the assumption that the government will take care of them. What ever happened to personal responsibility?
     
  8. iGary Guest

    iGary

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    #8
    You'd be complaining about all the lazy homeless old people you have to sift through on your way to work if there was no Social Security.

    I'm all for an "opt out" program, though. I'd rather keep my 7.5% and take the 7.5% my employer pays and invest it myself.
     
  9. yg17 macrumors G5

    yg17

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    #9
    That's the solution! Lets make all of the 100 year old Alzheimer's paitents get a real job and pay for their own healthcare and other expenses! They don't deserve help, that's socialism!
     
  10. gauchogolfer macrumors 603

    gauchogolfer

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    #10
    When SS was created it was one of the three legs of a retirement stool. The other two legs were corporate pensions and personal savings. How many companies are now paying pensions, and how many are defaulting on those obligations now that the economy is bad (trying to change people to 401k programs rather than pensions)? The airlines, for example, have reneged on their pension promises to many employees.

    In the absence of the corporate pension programs, personal savings isn't enough to support people, which is one reason people are more reliant on SS.
     
  11. leekohler macrumors G5

    leekohler

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    #11
    Oh- and how about companies who simply do away with pensions and leave people in the dust? That's the height of disgusting.
     
  12. Ugg macrumors 68000

    Ugg

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    #12
    Enron, Worldcom, Madoff, any major bank, AIG, etc, etc.

    Since the Reagan era, corporations have seen the government as something to cheat, its laws as something to be ignored and its employees/customers as something to be milked of everything possible.

    A sense of corporate entitlement is what happened to personal responsibility.
     
  13. sushi Moderator emeritus

    sushi

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    #13
    Another issue that creates pressure for this system is that life expectancy has been increasing over time.

    Even when I was a kid, I remember those who made it to retirement and received the gold watch. Many didn't.

    Currently, many are living well past their 70's which was not the case 50 years ago. For example, life expectancy for all races and both sexes, for those born in 1900 was 47.3 years. For those born in 1950 it was 68.2 years. For those born in 2005 it was 77.8 years. Link.

    Social Security came into effect in 1935. So from then until now, life expectancy has increased approximately 20 years. This has definitely put pressure on the system.
     
  14. steve2112 macrumors 68040

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    #14
    You can thank AARP for not having this option. It's one of the reasons I can't stand that organization. Remember back when president Bush proposed allowing people to opt out of a percentage of their SS contributions and use it to fund their own retirement plan? Well, the AARP and their massive lobbying arm turned that into "The evil Republicans are going to kick all the elderly off Social Security! Stop this plan!"

    Never mind the fact that 1) The plan was only for people below a certain age, 2) It was entirely optional, and 3) It was still only half of the employee contribution.
     
  15. Zombie Acorn thread starter macrumors 65816

    Zombie Acorn

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    #15
    If we were allowed to opt-out would anyone still stay in the system? I know I wouldn't. Someone is going to get left holding the bag. Pensions are going to continue to decline in popularity, no one is going to be a "lifer" at a certain company like in past generations, except maybe in government work.

    I still don't understand why the government would have a system where you pay for someone else's retirement instead of your own. If they would have had everyone pay for their own retirement we wouldn't have this issue, but I am guessing they were facing a generation who didn't save for retirement and it was either say **** em, or start bringing in money from the young crop under the pretense that it was some awesome retirement program they were enrolling into..

    Under a real retirement system you get what you paid in and don't really have room to bitch after that.
     
  16. Zombie Acorn thread starter macrumors 65816

    Zombie Acorn

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    #16
    We could always recycle the old people soylent green style I guess. :D

    I wonder if life expectancy will continue to rise though, you'd think with all the unhealthy garbage typical people eat that we would be dieing off quicker.

    edit: I am going to get the hang of using the quote + button soon, hopefully before a mod kills me.
     
  17. fivepoint macrumors 65816

    fivepoint

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    #17
    You've just uncovered some very important truths about all government mandated socialistic programs. I'm particularly interested in the lack of 'ownership' in the system. People don't see it as 'their own money' that they are investing and will eventually get back, they just think they pay the gov't now, so they will get taken care of later on. No personal responsibility or planning for the future whatsoever. Just pass the burden/buck on to the next generation and they'll take care of it!
     
  18. leekohler macrumors G5

    leekohler

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    #18
    I don't understand why I pay for a fire departmment that puts out other people's fires when I've never had one. I don't understand why I pay for a police department to solve crimes, when I've never been a victim.
     
  19. iJohnHenry macrumors P6

    iJohnHenry

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    #19
    I was thinking more in the lines of Logan's Run, but too late for me, I'm over twice that age now. [​IMG]

    You can "blame" modern medicine for that feat.
     
  20. Zombie Acorn thread starter macrumors 65816

    Zombie Acorn

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    #20
    Not the same really in my mind, that is distributing the cost of a public service over everyone in a community, old people still pay property tax to my knowledge, but they don't pay into SS.

    This is taking money from one group for retirement of another, a system that will eventually become inefficient when fluctuations in births happen, especially when there isn't really a cut off point to when the payout stops, you could live till 120.

    I see your point, but I don't think it applies here.

    Going back to fivepoint's post I have no idea how much money I have "fed" into the system, I would much rather have my retirement be an untouchable until you are 75 bank account that draws small interest.
     
  21. fivepoint macrumors 65816

    fivepoint

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    #21
    http://www.bloomberg.com/apps/news?pid=20601103&sid=aqLTt.TroGcM&refer=us

     
  22. mactastic macrumors 68040

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    #22
    'Rat tried a while ago to (falsely) claim that the poverty rate had increased since the inception of LBJ's anti-poverty programs. When I asked him to prove it, he said his observations "told him so"; which I thought was pretty flimsy evidence. So I went and looked. What I found was that the poverty rate has indeed decreased significantly since those programs were implemented, contradicting 'Rat's claim.

    Even more interesting was when you looked at the poverty rates broken down by age group. Turns out poverty rates among the working-age population have remained relatively stable since those programs were implemented (dropped between the inception and 1980, then beginning a slow but steady climb corresponding with the rise of conservative political dominance). But the main reason the overall national poverty rate dropped significantly is because since big-government, nanny-state, anti-poverty programs were implemented, the poverty rate among the elderly and the young dropped significantly. Remove those safety nets, and you'll see the rate of poverty among the young and the old shoot upward again.

    But then what do you do with the people who opt out, then make poor investment choices, or simply have the bad fortune to retire at a terrible time? Would you force them out onto the street and deal with the resulting increase in crime and homelessness, loss of business as a result of panhandlers, increased medical costs, etc? Or would you want someone in that situation to have a safety net of some kind?
     
  23. fivepoint macrumors 65816

    fivepoint

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    #23
    Just like Ponzi scheme. It works FINE, perfectly in fact, until you can't get enough new members to support the old ones!

    A liberal's favorite shape? The PYRAMID, of course! :) J/K, relax!
     
  24. iGary Guest

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    #24
    Good question. I don't have an answer. :D

    While you're busy talking about Ponzi schemes, we're still waiting on those number we asked for.
     
  25. imac/cheese macrumors 6502a

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    #25
    If I remember correctly from history class, the first generation to receive social security didn't pay into it. The money they received was paid for by the working generation. That allowed those of retirement age to actually retire which created a bunch of jobs for younger people so those people could help pay for the retirements of the older generation. Before social security, old people just kept on working because they didn't have the money to stop.

    <<Now it has been a while since I studied history, so all that could be completely wrong.>>
     

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