Where we find this gem on Social Security: If its not a ponzi scheme then what is it?
Social Security is fully funded for the next almost 3 decades. At that point, with no changes, it pays out a 75% of promised benefits (which if I remember correctly is larger than current beneficiaries receive inflation adjusted). How is this a situation where "my generation" isn't going to see a dime?
Social Security by law is funded by a 12.4% payroll tax (recent exemptions passed by Obama/Rep. excluded) on the first $107,000 of a persons income. Any surplus is used to buy government bonds. Its against the law for Social Security to pay out more than it has in reserves/"trust fund". Social Security intentionally taxed a greater share of payroll tax than was needed to sustain the program via the Greenspan Commission formed by Reagan (hence building up a surplus) because it was preparing for the baby boom. So the trust fund was intended to grow in size and then begin to decline in size when we were no longer taking in enough money to pay for the number of retirees in the system.
Are people in the private sector fleeing government bonds and I didn't get the memo? Must be something in a chapter of Fountainhead that I missed...
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