thill@ssc-bee.UUCP (Tom Hill) (11/19/85)
What is so funny is that Tim's article is so obviously bad that it really doesn't merit a reply, however, Tim seems to equate lack of reply with agreement so... >> >> [stuff by Dave] >> >> David Olson > Social Security has several important differences from pyramid schemes > such as Amway. In a true pyramid scheme like Amway, members are In a pyramid scheme those who get in early reap the benefits of those who come in later on. > encouraged to suck in more new members because they get a percentage > of the profits from every new member, AND every new member that member > recruits AND every new member that members recruited by your own new > member recruit. Oh, I see, I am forced to join Social Security so that I can pay for those who joined before me. Next I have kids who are also forced to join so that they can pay for me. And you say it isn't a pyramid, hmmm. > > [boring example of Amway deleted] > > The originators of a scheme such as Amway obviously stand to gain LOTS > of money from naive suckers if they can convince hundreds or thousands > of them to go for this scheme. Social Security does not work in this > fashion - there is no multiplying effect - the receipts from Social Social Security was based on the assumption that there would always be many more paying in than are receiving benefits. At least with Amway I can refuse to join! Not so with SS, I am forced to be a "naive sucker." > Security are divided amongst members of every generation as they > become eligible for retirement. As long as there are plenty of others entering at the bottom of the Social Security ladder there is money for these people. If there are not enough people the pyramid collapses. Simple isn't it. > Moreover as I have tried to point out (probably hopeless to blind > ideologues) payments to Social Security and benefits are time-deferred. ^^^^^^^^^^--such as yourself "Time-deferred" oh boy Tim has come up with a good one now. The problem is that (as has already been pointed out to Tim) that the government can cut SS any time it wants to. People in the system build up *NO* cash value what-so-ever. > This is really not that different than the operation of a bank. Not any different than the banks that have gone bankrupt you mean. > When I put money into the bank that money does not just sit there- > it immediately goes out in loans to other people. Those loans are As I have said, you build up no cash value in Social Security and get no interest on what you have put in. Those "loans", as you call them are *NEVER* to be repaid. You are forcing someone else to assume the debt of another (sound like a case for the Statute of Frauds to anyone out there :-). > almost always *more* than the actual amount of money placed into the > bank. These loans then provide immediate benefits of housing, cars, > new capital equipment, and other goods to people. If I have > a 20 year deposit or timed deposit then I cannot get the benefits > of my own money paid in until that period is up. Similarly with But you can get your money out in most cases, you simply have to pay some penalty. In SS you can't get money out in this way. > Social Security - I pay in for my own retirement which is money used > to pay the benefits of people currently retired. I cannot obtain You are betting that people later on will pay their 6 1/2% (currently) to support you in this grand pyramid scheme. > my own benefits until I have worked 10 years and have reached age 62. > My own benefits are dependent on those working later paying into ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ > the system themselves. But so my deposit in the bank is dependent ^^^^^^^^^^^^^^^^^^^^^ Need I say more. Tim has defeated his own argument with this single line. Those with weak stomachs may wish to stop reading here, Tim's analogies aren't pretty and contain no logic. > on those who have already received the benefits of my funds paying > them back. If they did not and the bank went bankrupt and there was > no federal insurance I would lose my money. In fact this used to > happen to people before the Federal Deposit Insurance Corporation > was established: which was why matresses were a frequent store for > savings. Of course if *all* the banks in the country went > bankrupt so the FDIC had to pay insurance for all those accounts, > the FDIC would be unable to do so - just as auto insurance companies > would go bankrupt if all cars got in wrecks at one time, or > any other insurance company would go bankrupt if *ALL* those insured > made claims. Of course this is EXTREMELY UNLIKELY! As one of my old roommates use to say "if ifs and buts were candy and nuts, oh what a life we'd lead." > AS Jeff Myers' article pointed out, the Social Security System should ^^^^^^^^^^^--great source Tim :-) > be in good shape for years to come. This also points out Dave's Years to come + My age < 62 QED > mistake in saying that Social Security requires constant increases > in those in the system like an Amway pyramid scheme. Social Security is > in good shape *despite* the decline in population growth projected > in the next decades. > tim sevener whuxn!orb This last one is so full of bull. The SS system has been "fixed" at least twice in the last ten years. The fact remains the whole system depends on having more people paying at the bottom than are collecting at the top. Why Tim insists on repeating his bogus claims is beyond me. His ideologies are getting in the way of the facts. Anyone with half a brain knows that if they were allowed to invest that 6 1/2% on there own that they would be miles ahead when they retire and would have the money to enjoy their retirement instead of merely living on a subsistence income. Smile, Tom Hill
tdh@frog.UUCP (T. Dave Hudson) (11/22/85)
> Anyone with half a brain knows that > if they were allowed to invest that 6 1/2% on there own that they would > be miles ahead when they retire and would have the money to enjoy their > retirement instead of merely living on a subsistence income. Try 13% and rising. (13 is an approximation both mathematically and economically. If matching contributions and visible contributions were both no longer stolen, the change in income would affect the availability of labor, possibly resulting in a further change in income. But, assuming no further change, the old taxes would be (13/1.065)% or 12.2%, nearly 1/8, of "gross income".) David Hudson