Tuesday, November 27, 2012

Killing Social Security With a Smile?

So says liberal columnist Froma Harrop. I don’t agree with her, but she puts her points well.

1 comment:

WilliamLarsen said...

".It's a wildly popular government program that's totally solvent until 2033.”

The word "solvent" means able to pay all liabilities from current assets. The problem is Harrop states that it is solvent until 2033. What Harrop has not stated is that those who will not benefit from Social Security prior to 2033 will contribute to it, but receive no benefits. What happens to this date if we exclude all those from the payroll tax who do not turn 65 by 2033? The date moves forward well before 2022. Then we should ask the question once again, what happens to the 2022 date if we exclude all those from payroll taxes who do not turn 65 by 2022? The date moves to about 2018. We should then ask the question once more. We would find that we would exclude basically all under age 62 from the payroll tax and benefits would have to be paid from assets or the $2.6 Trillion SS-OASI fund. Paying full benefits would exhaust the trust fund in less than five years.
So I ask the question "Is Social Security OASI" Solvent? It is not solvent, but insolvent.

The problem is that in Nestor v Fleming the Supreme Court of the United States that no person has guaranteed benefit from Social Security. Congress reserved the right to alter, change or repeal any portion of the Social Security Act without liability.

In simple and Technical terms Social Security is a Government Ponzi Scheme and is no different from a bait and switch practice used by some unscrupulous companies.