My only comment, to help balance the reporting on the Social Security issue, is to suggest that readers google Commissioner Ball regarding the future of Social Security. Wake up, America!

I have a difficult time believing social security is in trouble. With record numbers of workers each year, where has this taxpayer money gone? Unless the money entered into this account has been used for purposes it is not supposed to be… like other government wanted projects, illegal immigrants, and wellfare folks… I should be able to retire without a problem. When Roosevelt first started this program it was to help us in our retirement years. Now government wants us to work until we’re 70! Forget it! With the trillions of dollars we spend outside the country on non-Americans, maybe we should put this money where part of it belongs… to our seniors!

Good points! It is all a matter of priorities. Look at all of the money to fuel the endless war machine, the military-industrial complex that Ike Eisenhower warned us against! Trillions to kill, but little, comparatively speaking, to heal. We throw our blood and treasure down the black hole that is Iraq, while our country’s infrastructure is crumbling, our children go without healthcare access, and our veterans receive shabby care. Blackwater mercenaries get rich, while our troops make a whole lot less! Our priorities are upside down in our beloved country. There is a big push to privatize Social Security by those who want to feed Wall Street. We tried that before: check out the Roaring Twenties/Great Depression. We had old and poor people selling apples on the roadside to make ends meet; that’s why we set up Social Security in the first place–to put a social safety net in place for the people. Do we want the one per cent who currently own/control over fifty per cent of our national wealth to get an even bigger slice of the pie? It is all about priorities, folks! Do we want what is best for the greater good, or only for the greedy few, like the Chamber of Commerce/Fortune 500/Show-Me Institute types? Wake up, America!

A big part of the shortfall is from the benefits paid to people whose net payments exceeded their net payments into the system. Instead of the estate tax going towards the general fund, why isn’t the estate tax directed into the social security fund to recapture the difference in payments? This would amount to a pre- and post-funding of social security benefits such that on average people would pay into the system what they receive.

The crackpots are out in full force today. Social Security was doomed from the word go. It is and will remain a Ponzii Scheme. WRS, since you are fond of Google, look up Ida Mae Fuller. She paid $24 into SS and took out nearly $24,000. She was the first to receive ongoing payments. That first example should have been a big wake up but no, we think SS is just a peachy program.

And what is your alternative, selling apples on the street corner? Those who forget the past are doomed to repeat it. Milton Friedman, the Show-Me Institute, and the Chamber of Commerce want us to return to an era of 14 hour workdays, no unions, and Robber Barons. Wake up, America!

Here’s the economic reality about Social Security.

Social Security is, and always has been, a program for transferring money from people who are actively working to those who are retired. Because this sounds “socialistic,” it has been “sold” to people as being like a personal savings account, but in fact it is a government wealth transfer program that works in real time.

The only “Ponzi scheme” aspect of it is that the ratio of working people paying into the fund, to retired people being paid out of the fund, has been increasing (despite relatively minor increases in the age of eligibility to receive benefits). This changing ratio is a fact of demographics — not the result of some scheme by the government. Demographic reality is necessarily going to impose a greater financial burden on working people, to support retired people, no matter what part of the financing is done through the Social Security program and what part is done by working people purchasing the private financial assets of retired people. (Working people do this to some extent whenever they make investments in stocks and bonds.)

The rather paradoxical thing about the Social Security program is that it is regressive in some ways and progressive in others.

The regressive part is that Social Security revenues are collected from a regressive tax on employment earnings. Since revenues exceed outlays, the excess is used to supplement general federal revenues (which are arguably collected through more progressive taxes). This is done through the “Social Security Trust Fund,” which OF NECESSITY is really nothing more than an accounting device for tallying transfers between the Social Security account and the general fund. Around 2018, money will start flowing back from the general fund into the Social Security program and correct one aspect of this lack of progressivity.

On the other hand, Social Security is somewhat progressive for people who live long enough to collect their benefits, in that low income people receive a higher rate of return on their contributions than higher income people. It’s not a criticism, but simply an observation that most of this “higher return” is actually just compensation for the inflation that has occurred since retirees made their contributions to the program.

The fact that the real purchasing power of Social Security benefits has also increased is sort of a way of sharing the overall increase in Americans’ purchasing power with retirees. I see that as one feature of Social Security that will need to be curtailed in the future because of the changes in demographics — and for various fundamental reasons, “privatizing” Social Security would only subject retirees to greater financial risk without increasing their purchasing power.

There is always the much maligned option of “Means Testing.”

Regarding post #8 — Social Security benefits ARE essentially means tested. Above a certain income level, Social Security benefits (actually, 85% of them) are added to taxable income. In effect, the benefits are reduced by what they add to a person’s income tax.

The advantage of doing it this way is that it reduces complexity, since there is no need to file income data with the Social Security Administration so that they can do the “means testing.”

Ted, what part of how a Ponzi scheme works do you not understand. Lets use me as the constant in an example.

I have paid into SS now for 20 years. The money I paid in goes to someone else(supposed surplus). When I reach 67.5 in 33 more years, I need some workers to put money in so that I will then be able to take it out. If not enough workers are present then to support me and people my age, the system collapses. Spitting image of a ponzi scheme.