I am sure you have looked at your paycheck and seen a large sum of money taken out as FICA tax. Ever wonder where it goes? Into the lockbox? Ever try to get it back on tax return? I haven't complained about socialism for a few posts so here it is. Social Security and Medicare are a scam. If this money was invested by the owners then they could all retire on their own. Instead it is stolen and then wasted.
-Michael
Comments and article sent to me from a friend.......
Missing from all of this is the concept that all Ponzi schemes mathematically fail given enough time. That is why they are illegal to set up and execute, unless of course you're the government. Then it's called a "program".
The term "trust fund" is also a misnomer, as it implies that there is money sitting in the fund with your name on it. Not until the very last sentence does the real picture begin to emerge - the "trust fund" is nothing more than a stack of government IOU's.
Anyone ever see the movie "Dumb and Dumber"? They found a suitcase full of cash, spent it and filled the suitcase with slips of paper that said IOU $XXX? The crook came back to get his money, and when he had them at gunpoint, the idiots explained, "All the money is there. These slips of paper are as good as money. See, this slip of paper is worth $250,000. You might want to hang onto that one."
It was funny because no one in their right mind would actually believe those slips of paper were money, even though the two idiots in the movie thought they were accounting for it all. But the government can make good in its IOU's. The problem is that when it does so, it hurts the economy either by inflating existing currency, or stealing wealth from the private sector, or both.
To raise the actual cash, the government must:
(1) Print more money - which is just another tax that depreciates the value of already existing dollars, but don't expect the report to say that.
(2) Raise taxes - self explanatory
(3) Cut spending - no necessarily "in other programs". Likely they'll legislate that payouts are less but are distributed over a longer time, though they can't also legislate that you live X years longer.
Most likely a combination of all three will be done. The Feds will also print more money since this is a proven method of bamboozling more money from the public without their knowledge. They will also raise taxes, and likely will cut spending from the program itself as described above.
And oh yeah - the Supreme Court has already ruled that you have no actual claim to this money. Kind of redefines the concept of a "trust fund". The money isn't really there, and it isn't really yours anyway. Ladies and gentlemen, this is "our social safety net".
Social Security, Medicare Trust Funds Sink
By MARTIN CRUTSINGER, AP Economics Writer 57 minutes ago
The trust fund for Social Security will be depleted in 2040, a year before expected, and Medicare will exhaust its trust fund reserves just 12 years from now, trustees for the programs said Monday.
Their annual report showed deterioration in the financial condition of both of the government's two largest benefit programs.
A year ago, the depletion of the Social Security trust fund had been projected to occur in 2041 and the Medicare hospital insurance fund in 2020.
The trustees, who include the head of the Social Security Administration and three members of President Bush's Cabinet, painted a sober assessment of the health of the two programs in advance of the looming retirements of 78 million baby boomers.
"We do not believe the currently projected long-run growth rates of Social Security or Medicare are sustainable under current financing arrangements," the trustees said in this year's report.
Bush's efforts last year to overhaul Social Security went nowhere in Congress. Even members of his own party refused to support the benefit cuts that would have accompanied the establishment of private accounts for younger workers.
Treasury Secretary John Snow, who is the chairman of the trustees' panel, told a news conference that the country faced a "looming fiscal crisis as the baby boom generation moves into retirement." He said the administration stood ready to work with Congress to come up with a solution.
"The serious concerns raised by the trustees' reports demand the attention of America's policymakers and the public," Snow said.
Bush, facing bleak prospects for winning approval for any changes in an election year, called in his State of the Union address for creation of a bipartisan panel to study the issue and come up with recommendations, just the latest in a number of commissions that have examined the programs.
While the depletion of the reserves built up over past years is projected to occur in just 12 years for Medicare and 34 years for Social Security, both programs will face financing issues much sooner at the point that the amount paid out each year exceeds the amount the government collects to fund them.
For Medicare, that occurred for the year of 2004. However, the program is projected to be in the black again before crossing over to paying out more than it takes in again.
For Social Security, the point at which the program will pay out more in benefits than it takes in will occur in 2017, the trustees projected, the same as in last year's report.
The trust funds contain the equivalent of government IOUs. To raise the actual cash to meet obligations, the government must either borrow more money from the public by issuing marketable Treasury securities, raise taxes or cut spending in other programs.
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Social Security: http://www.socialsecurity.gov
Medicare: http://www.cms.hhs.gov
