Recent columns make the claim that Baby Boomers will receive more Social Security and Medicare (FICA) payments than they contributed, which is a false assumption.
Your FICA payment combined with your employer’s are about 15 percent of your total pay. A person averaging a modest $30,000 a year over a 45-year career would “contribute” $202,000 to the fund. Why are we to assume the government should get our money for free with no interest paid or accrued?
At a very modest return of 5 percent, the compounded total at the end of 45 years would be over $718,000, which would take a Boomer out to 92 years old at a withdrawal rate of $26,000 per year (Social Security and Medicare combined).
To add insult to injury, our Social Security is taxed twice, once before “contributing” and again upon payment.
Please stop lumping welfare, food stamps, Section 8 housing assistance and Medicaid into the same class of entitlements as Social Security and Medicare. These payments are free from a caring society funded by people who actually paid into the system and who deserve a fair return when they retire.
Mr. Covey, thanks for putting the issue in perspective by the numbers.
Yet another manifestation of dreaming "facts" instead of facing facts.
Social Security has collected $2.7 trillion more than it has paid out - hardly a failure. The $2.7 trillion has been borrowed and used for other things including keeping income taxes artificially low. Some propogandists preach that Social Security is broke or some sort of Ponzi scheme. Neither is true! When you hear this, it's code for "we don't want to pay back what we borrowed".
::::::::::::
Social Security is a politicial football for the radical righties who distort the facts just like Fox News in order to try and privatize it for the Risk Gamblers and Dice Rollers on Wall St. just as former nightmare President G. W. Bush The Waterboarder/Torturer In Chief attempted to do. It is just that simple, period. It is one of the greatest programs in this world.
::::::::::::::::::::::
Now of course, the Obama Haters throw in their lack of knowledge and facts on Social Security as a hot button against Obama - like the infamous Comrad Sharon Angle who came out lying about it from the very beginning of her failed attempt to become a U.S. Senator - she was caught red-handed lying on TV ... how stupid is this woman?
::::::::::::::::::::::
The radical righties know the facts on Social Security are easily at hand with a few taps on the key board, but due to their stupidiy, hate and racism against Obama they simply falsify and lie about Social Security repeatedly over and over ... a worthless exercise in time wasting
::::::::::::::::::::::
Ola - I think mostly not many folks regard the radical righties with much seriousness anyway ... they are basically losers as was Head Torture Bush Man who threw his arms up and walked away from nabbing Bin Laden .... thank God Obama did not ... he and the Navy Seals got the job done and continue to do a good job whereas the previous so called President did a nightmare of a job - a simple minded man who stole his way into The White House ... let this be a warning, folks.
Nice letter Mr.Covey,No B.S.here just simple math.
Brian brings to our attention yet another example of how government takes away our potential earnings by convincing us that they can save & invest our money in better ways than we can. In this case, the government, through social security, gives you less of a return for your money AND raids the fund to cover over-spending. You could have retired earlier....
Haven't we seen enough proof that government doesn't know how to manage money?
Enjoyed the letter, Mr. Covey.
But as you can easily see by the ensuing comments, your sound reasoning is a water drop in a lake of virtual right wing insanity.
The Republican Party, along with their bastardized form of conservatism formulated by a combination of Tea Party infections, religious zealotism, and unadulterated, blind hatred for anything associated with President Obama and his entire administration, simply cannot have this kind of talk.
How dare you actually show proof by the actual numbers that something works according to how it's supposed to?
FDR wanted Social Security to be a 'big pile of money' was exactly modeled as a savings account. FDR felt this would act also as a backup for national hardships and emergencies only. As this 'big pile of money' began building up, the Democrats (who held the House from the early 50s until 1994, when Newt et all won - and from where all spending legislation flows), began stealing / diverting this savings for their political purposes. Thus, the '2.7 Billion' the previous poster wrote of is nothing but IOUs of a growingly bankrupt nation. I would rather have the money.
I agree the workers deserve a fair return, bit is not going to happen with SS, and this is why the system is in trouble. The 5% return is way to high as SS can only be in "safe" investment,like t-bills, not stocks, mutual funds, corp bonds,etc and look what happened when they bought all those long term US bonds, everyone said Congress stole the money... This is why it is much better to have your 401k, IRA, etc to retire on, as SS is really just a small supplement anyway. The real return on SS is probably less than 1/2 of 5%, so the total much lower than the $718k stated. Also every US citizen gets a benefit whether or not they paid in, so your money paid has to be split with them, for example your spouse can get another check equal to 1/2 of your pay even if she has never worked, and of course all those who never worked get SSI. Take a look at the article from the Christian Science Montitor
http://www.csmonitor.com/2004/1227/p01s0...
i read the same typical republican/teabagger BS about social security. when the GI bill was being created, the same whining was heard from the same dinosaurs who felt that the veterans would sit on their ass and live off the fat of the land. it didnt happen, did it? any politician worth his salt is not going to take away the funding for SS, because if he/she did, they'd be unemployed their next election.
The government wins either way. If your spouse dies early into their retirement they keep half and give the other half to the remaining spouse. If we are single and die before we collect SS then that's money in the government's pocket. Nice setup for the government, a beneficiary of sorts when bad happens to us.
Truly enjoyed Mr.Covey's letter, which provoked the full spectrum of light on the subject from Las Vegas Sun Commenters, who bring on the conversation and balance to featured articles.
A comment by Leric Goodman left me a bit puzzled, perhaps Leric can point out the "dreams" and counter with the "facts." It would liven things up, no doubt.
Folks have implicitedly trust the Federal Government for years, I grew up in that mindset and culture. It sure broke my heart to find out that trust has been betrayed. People were happy to put into that safety net for the rainy day or end of the trail in their lives.
David Covey beamed a ray of hope admidst the dark times we face. Re Freeman made a few comments to balance out what was penned. The Las Vegas Sun Commenters rose to the occassion, to disspell misunderstandings. One can only hope that Social Security will continue another 100 years for not only us, but future generations.
Blessings and Peace,
Star
Good old Brian distorts and lies to make himself and other liberals happy. He doesn't even acknowledge that low income workers are not making any contributions to SS. Then he promotes some faulty idea about a 5% return. Where he gets that he doesn't say but the accepted return is about 1% as far as I can remember.
His work and contribution assumptions are so far out of line it is not worth further comment. He claims that out of a 200,000 plus contribution there should be over 700,000 somewhere. Get over it you idiots there is no fund gathering any interest. How dumb can you get?
Feel good you morons. It is you who is bankrupting our country.
Star, you are particularly disturbing. If you believe under current conditions the SS fund will last 100 years you are a dangerous teacher indeed.
Before reducing contributions and the recession SS was solvent until 2037 using faulty assumptions. Last year for the first time contributions to the fund was less than the payments.
One study shows that unemployment has dropped at the same time SS disability payments are exploding. I challenge any one of you to deal with that.
Mr. Covey,
You have perfectly stated the case for separating SS 'Contributions' from the multitude of welfare state disbursements. Well done!
Warm regards,
Purgatory
To show how far behind the curve "Purgatory" is the word "contributions" are no longer applicable. That money is called taxes and it has been reduced for many so they can fill their tanks with gas.
I guess none of have heard of SS disability payments, the fastest growing element. Survivors benefits are another drag on the program.
1. Here is the way Social Security works: You pay in money and your employer pays in money. These are taxes. (They have to be taxes because the federal government has the power to tax but not the power to take "investments" or "insurance premiums.") You retire. You get a government expenditure known as "Social Security Income" . (It has to be a government expenditure because the government has the power to spend for government purposes, but there is no "general welfare" power.) Other people and their employers who are paying in their taxes are probably the source of your SSI checks. Call if whatever you like, but this arrangement was the only one that passed Constitutional muster.
2. Here is why we have Social Security: because people lost their savings and their investments in something called the Great Depression, which tanked the stock market and killed off most of the banks. (The Great Depression was a good example of (A) what can happen when you let things fail and (B) what can happen as a result of "austerity" on the part of governments when the economy is either failing or just struggling.) Social Security is there to provide something -- not a lot, just something -- no matter what.
I would rather have $718,000 when I retire. But we can settle I guess for less, we have for years now.
Goodman,
Thank you for the short lesson, although your answer to why we have Social Security is mostly incorrect. I am sure most of your fellow commentors appreciate your efforts nonetheless.
Regards
Purgatory
Leric, again thanks for a perfectly non sensical description of social security. Now we know why liberals don't really have a clue. If you would read more liberal websites you would learn that young people, currently, cannot expect to collect more than 75% of what they have contributed. Liberals are just fine with that.
You can call It what you want,but in realty social security is a trust fund set up in the 1930 by President FDR. It was and has been funded by workers and employers who both contribute to it. It's main purpose was to help people with retirement. If It Is used for other programs It cannot sustain itself for it's intended use.So let's look at the real cause of the problem, and not make up excuses.
The trust fund consists of IOU's from the government that stole the money for other purposes. Almost from the beginning additions to the retirement fund were made (easy to give things away). These include SS disability and survivors benefits. There is no actuarial support for the amount paid. It is pay as you go. If you don't understand, look it up.
Funding has been cut by Obama under the cover of cutting taxes. Since 1/2 pay no income tax SS is all that is left.