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I hate Social Security & Medicare

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May 14, 2009 – Comments (19)

 

So I got my favorite work of fiction in the mail the other day.  No it wasn't a new book from Amazon.com or even one of my myriad of magazines.  It was my good old Social Security statement.  I can't stand that thing.  In it, the government basically lies right to your face and then admits it later on in the FAQ section.  Uncle Sam goes on and on about all of the wonderful benefits that I will receive when I retire, but...

A) I'll have to work until I'm freaking 70 years-old to receive my full benefits.

and

B) Right in the FAQ section it admits that right now the government projects that it won't have enough money to pay me the full sum that it just said it would.  Oh no, using its projections (which I suspect are overly optimistic) they now project that I will be able to receive $780 for every $1,000 that I'm owed.  Sure.

Looking at all of the money that I've been forced to throw into this ponzi scheme over the years, which is conveniently totaled on the pamphlet, makes me absolutely sick.  How is the government able to spend this money now?  Who decided that was a good idea?  If I'm not mistaken this money is set aside in Canada and it can't be touched by the grubby politicians.

The government should just be honest and admit that this program is nothing more than another tax and that I will likely never most of the money that they are promising me right now again.  The same goes for Medicare.  How in the heck is the government going to expand its healthcare program when it can't even come close to adequately fund its current one?  Don't get me wrong, it makes me absolutely sick that there are poor people out there who can't afford proper medical care.  I just don't understand how we are going to pay for expanded coverage.

At least I can take solace in the fact that my parents who have done so much for me over the years are collecting Social Security right now.  My Dad always gives me a hard time and says that I have to keep working multiple jobs so that he can collect his government checks. 

Enough grumbling, but I just can't see how the lack of retirement savings that most Americans have is won't to serve as a huge drag on economic growth going forward.  A record amount of wealth, much of which was retirement savings, has been destroyed.  I heard the other day that over 100 of the Fortune 500 companies have eliminated their 401K match programs this year.  Many public and private pension funds are a complete mess.  Who knows if Social Security will even be there by the time that people in my generation retire.  That's a lot of spending that retirees aren't going to be able to do OR a lot of new taxes for the people who are working.

Recession Drains Social Security and Medicare

Deej

19 Comments – Post Your Own

#1) On May 14, 2009 at 5:39 PM, Masterofdabull (96.31) wrote:

Look at the history of Social Security. It was never meant to be a retirement plan. It started, oddly enough, in the depression of the 30's. Now every insurance and retirement companies handling your pension plans use it to decide how much they will pay when you retire. The 401k plan was to be a precussor to eleminating Social Security.

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#2) On May 14, 2009 at 5:48 PM, uclayoda87 (29.29) wrote:

I'm suprised that the government just doesn't increase the starting beneficiary age to 75 years in 2010 for new beneficiaries, then increase it again to age 80 in the year 2015, and so on... I believe the book Catch 22, explains how this would work.  By the year 2020, the medicare crisis would be over.

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#3) On May 14, 2009 at 5:50 PM, outoffocus (23.28) wrote:

The original intention of social security was to make sure that the elderly and disabled didn't end up ont the street eating cat food.  When it turned into a full-on entitlement program, giving benefits to the haves as well as the have-nots, thats when it went downhill.

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#4) On May 14, 2009 at 6:03 PM, catoismymotor (< 20) wrote:

Deej,

 

Bravo! Well said! I'm with you. I am not counting on ot to be there at all when the big day comes to retire, decades from now. 

 

Cato

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#5) On May 14, 2009 at 6:40 PM, alstry (36.06) wrote:

By the end of THIS SUMMER....it will be pretty clear to all that not only can't we fund social security and medicare.....we will learn that practically everything in the nation is bankrupt or heading toward bankruptcy.....NOW!!!!!

NEVER IN AMERICAN HISTORY HAS THERE BEEN SO MANY DISTRESSED ASSETS, HOUSEHOLDS, CORPORATIONS, AND STATE AND LOCAL GOVERNMENTS AT THE SAME TIME.....AND CONDITIONS ARE DETERIORATING RAPIDLY.

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#6) On May 14, 2009 at 6:47 PM, finabuddy (94.94) wrote:

Poor people that are sick are on Medicaid, not Medicare. There is a difference. I agree with you on social security, its just a huge government ponzi scheme that doesnt have enough workers contributing. The only way out of Medicare and social security is to cut benifits or raise the qualifing age. Raising the age for healthcare doesnt make people less sick, so you will have a lot of retired seniors that cant afford care not on the government's plan yet which is going to cause a lot of problems/cost money as well. Cutting benefits and reducing what Medicare pays to providers is the only logic choice. This will take a lot of time because this huge business, and unfortunantly you have legislators that know little to nothing about running a Medicare business, ei it is difficult to discern which methods will be the most cost effective and cheapest. Social security should be on a needs basis and not be a blanket program. Finally, the entire US budget is only sustainable if tax revenues and the ability of the US government to borrow and print money. This is why we need to be fiscally conservative and why Obama spending more money and faster than ever on useless construction projects is a waste. We need to be thinking about healthcare costs and not have the additional burden of paying for the stimulus bill's expanding programs.

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#7) On May 14, 2009 at 6:55 PM, speedybure (< 20) wrote:

My econ blog http://www.comingcurrencycrisis.blogspot.com goes above and beyond your already great blogspot. I'm def in the same boat. Should you choose to check it out, the post is archived but the title is "healthcare will kill us"

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#8) On May 14, 2009 at 6:55 PM, speedybure (< 20) wrote:

My econ blog http://www.comingcurrencycrisis.blogspot.com goes above and beyond your already great blogspot. I'm def in the same boat. Should you choose to check it out, the post is archived but the title is "healthcare will kill us"

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#9) On May 14, 2009 at 7:32 PM, FAHayek (90.95) wrote:

Who among us is suprised. The government bureaucracy has never been so adept at managing a budget. In fact, who here thinks they are entitled to Social Security? Guess whatt, when FDR created the trust, he sold it ot the public as a pension system, however, in court, his lawyers were fighting litigations, by arguing the Social Security tax was one of a general nature, meaning that the revenue derived from the collection was part of the general treasury, it was not set aside in some trust. from the treasury department it was than doled out tot he various agencies. Thus, those who think you are entitled ought to understand that the system is not even a true trust fund. Just look at the court records for your self.

On another note, why is it that the damned keynesians think the government can support deficit spending. How on God's green earth can they if these "entitlement" programs are sucking up more and more of the budget. This is why they don't understand monetary policy, the government like you me and any company can raise money by credit and issue bonds. The currency is based on a few things, one the strength of the Us economy, two the faith in the Us government and third the amount of leverage used. Well lets see, the leverage is increasing, the economy is  in tubes and faith in Us government is on the decline. The dollar as currency is being severely weakened, and the effects of the borrowing are not increasing the economic activity. But in order to support or maintain the status quo, the Us government, like all those people who borrowed money to make up for the loss of true income, will do the same, borrowing on the future and taxing us to death, just to pay some phony, trust program. If all the money collected since the inception of the program was invested, it would be worth a lot more on the whole.

What they and those greedy entitlement people are doing is the equivalent of stealing from the unborn, because they are going to have to work to pay off the debt that in no way helped them. remember, the Us debt is going to skyrocket faster than any phony tech bubble or housing derivative, the only thing is, it won't come back down, there can be no correction. So heres the end result, 55 Trillion which will take many years to bay back. In fact the total debt structure of the US is so out of whack, that in order to create growth, the US must borrow more and more money to generate the same 1% of GDP growth, which will be the only way out besides ending the largest ponzi scheme of all time and creating a stronger, more stable currency, with out such interference by ridiculous government regulation and social engineering.

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#10) On May 14, 2009 at 9:42 PM, Donnernv (< 20) wrote:

A footnote.  I am paid SS.  I accept receiving it...I paid it in for 35 years.  I will never live long enough to get back what I paid, but, Oh well.

OK, don't pay it to me, but don't ask me to pay in.  How the decision of who would pay and who is exempted is made is beyond me.

But today, I received $250 from SS.  Why?  Because I receive SS payments.  If they looked at my 1040, it would be clear it's meaningless to me. 

Whoever made the decision to send $250 to everyone receiving SS, regardless of need, is an idiot.

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#11) On May 14, 2009 at 10:56 PM, alstry (36.06) wrote:

Donner,

You are going to have to give them back $100 in taxes.....so don't spend it all;)

Why do you think I am so concerned when all these government workers get fired......who is going to pay taxes???

At the end of this year...you and your family may be one of the few able to pay taxes.......if the state and feds need a few trillion.....you think you will be able to raise the funds on short notice???

BTW, I am only half kidding.

If the government can tell GM senior debt holders they are screwed....why not you or your retirement account????

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#12) On May 15, 2009 at 9:12 AM, dwot (38.88) wrote:

Canada has a ponzi scheme as well.  We also have a pension fund that I think is supposed to carry about 5 years of funds (maybe it is 2 years), but it is way down right now and I highly doubt that the assets of the fund are fairly valued.  This is the last report I have read on the state of the fund.

The only thing that I think Canada has going for it with this thing is timing, we were one of the first governments to do this and by the nature of being early the fund saw good returns, which I suspect it will be giving back now.  I also suspect funds that copied Canada will end up worse off.  I think in the longer run it will show that we'd have been better off applying the money to debt, but then when a country pays off or pays down debt, like we did, a new generation of morons are elected who manage to undo a generation and half of hard work at reducing debt in a mere two years.  

I feel so lost in wondering what all those high taxes we paid were for and to what end when it is being destroyed at about 10 times the rate that we were able to build a foundation.

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#13) On May 15, 2009 at 9:17 AM, dwot (38.88) wrote:

One thing about wealth destruction, more of the money left will be spent at home.

What I see in the newly retired around me is the travel bug and the goal in retirement for many that I know is to be able to do some traveling.  Well, that's great for the economy of where people travel to, but it is a huge drain for the country of origin.

The way I see it right now is people that are collecting CPP only paid a tiny fraction of what they get and too many are taking that money and spending it in another country.

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#14) On May 15, 2009 at 10:18 AM, TMFDeej (99.28) wrote:

Thanks for sharing your thoughts on how the Canadian system works, dwot.  It sounds like a pension fund.  It may be underfunded but at least there's some real money there and the Canadian government doesn't spend it all immediately like the U.S. government does. 

Social Security is worse than Madoff's ponzi scheme because at least the people who lost their money in the latter had a choice.  U.S. citizens are legally forced to contribute to Social Security whether they want to or not.

For those who don't think that Soc. Sec. is too expensive, try being self-employed for a while and have to pay both the employer and employee contributions for it.  Between that, fedral, and state tax more than half of every dollar that a self-employed person earns goes to taxes.  Taxes like that suck the desire of people to work hard and be successful.

Deej

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#15) On May 15, 2009 at 10:33 AM, Melaschasm (55.72) wrote:

If you are under the age of 40, you should assume that you will never get a penny from social security or medicare. 

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#16) On May 15, 2009 at 12:19 PM, OleDrippy (36.66) wrote:

A couple things... 

1) What "Trust Fund"? At least for SS, money coming in goes to the general fund of the gubment, which is running at a deficit, which means there is no "lockbox". 

2) SS is the greatest ponzi scheme in history. It depends on a growing population, growing salaries, growing GDP, ALL of which have stopped or are grinding to a halt.. We are SCREWED.

3) Was SS not started many moons ago in Poland? It was an ingenious play by the government to increase revenues.. They figured out what the average life expectancy of the taxpayer was, promised benefits, then set payouts to start JUUuuust past the expected life expectancy.. BRILLIANT!! Would work like a charm! Too bad we're living longer now.. Damn.. Don't worry, they'll push benefits back soon enough. 

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#17) On May 15, 2009 at 2:44 PM, eldemonio (98.67) wrote:

Cat food is surprisingly delicious.  Give me back my money you old, washed-up bastards.

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#18) On May 15, 2009 at 6:05 PM, lucas1985 (< 20) wrote:

http://ourfuture.org/blog-entry/2009052012/stop-entitlement-crisis-fear-mongering

http://www.counterpunch.org/lindorff08042003.html

http://krugman.blogs.nytimes.com/2009/02/23/entitlements-on-the-back-of-an-envelope/

http://krugman.blogs.nytimes.com/2009/02/02/social-security-hysteria-lives/

 

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#19) On May 15, 2009 at 6:50 PM, AbstractMotion (53.14) wrote:

lucas1985:  There is nothing from these funds to draw from.  Their entire holdings consist of US treasury obligations with no marketable value.  Ergo when it starts putting out more money then it's taking in the government will either have to start borrowing more from abroad, push it onto the tax payer or attempt to inflate the currency to pay for it (which will actually increase the benefits they'll have to pay out too).

 

http://www.ssa.gov/OACT/ProgData/investheld.html

There's nothing of any value in there.  On top of that each and every year any surplus that's suppose to go into this fund is simply counted as extra income by the Federal government and spent elsewhere.  As people have stated this is actually the biggest ponzi scheme in the world.  Krugman should know this and why he's writing about things as if that is not the case I do not know.  Any idiot with a computer and five minutes of time can find this stuff out.  There's no cushion or safety net, it simply isn't there as anything other than a government (taxpayer) IOU.

 

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