Depressing post du jour
I might like this Rick Perry fella. **:
Texas governor Rick Perry is being criticized for calling Social Security a “Ponzi scheme.” Even Mitt Romney is reportedly preparing to attack him for holding such a radical view.
And that right there is why Mitt isn’t the conservative choice.
Social Security is a Ponzi scheme because workers (are forced to) pay into a system where the money isn’t invested, but passed along to current retirees (or the disabled) while THEIR retirement will depend upon future workers. This worked ok when the population of workers was on the rise. Now and in the future? Not so great.
Social Security, on the other hand, can rely on the power of the government to tax. As the shrinking number of workers paying into the system makes it harder to continue to sustain benefits, the government can just force young people to pay even more into the system.
In fact, Social Security taxes have been raised some 40 times since the program began. The initial Social Security tax was 2 percent (split between the employer and employee), capped at $3,000 of earnings. That made for a maximum tax of $60. Today, the tax is 12.4 percent, capped at $106,800, for a maximum tax of $13,234. Even adjusting for inflation, that represents more than an 800 percent increase.
We’ve got a $20 trillion in unfunded liabilities looming in the future.
One of the reasons we’ve got fewer workers? We’ve got a disability explosion. Disability recipients have increased by 50% over the last ten years. Why?
The problem, Burkhauser and Daly report, is that people with disabilities have chosen government payments over work, not because of short-term economic trends, but because public policy encourages them to. And while recent reports have tended to focus on the last ten years, the problem has been growing for much, much longer.
In 1981, 7.3% of the workforce had a work-affecting disability, but 35% of them worked anyway. In 2010 -only 22.6% of those with disabilities were working. Of this same group, 32.6% were collecting SSDI, but by 2010 than number jumped to 52.4%.
And SSDI is no small potatoes. Lifetime benefits amount to around $300,000.