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AAQ> “This is something that will be paid back with reasonable assurance.”
Neville > No, THIS is silly. If you only got back exactly what you paid in, it wouldn’t be enough for anyone to live on rendering SS uselesSS does not have to be a ponzi scheme – one generation pays, another receives. Payout can be compatible (on average) with what the other generation paid in. Ponzi scheme presumes that payouts in early phases are way above normal and can be only paid by sucking more suckers in. The main problem SS might be low on funds right now is that, B’H people live longer and thus receive SS for longer time than previous generation. This is not true any more, unfortunately, lately with several years same or even lower life expectancy. The next problem is that people are not having enough children.
“Are you suggesting a charity system to substitute for any tax? ”
Why would it be charity? It’s not charity when I give Walmart money for goods and services. Private businesses turn out profit without having the ability to coerce people at gunpoint to give them money like the government does. Meanwhile, the government plunges itself into debt despite this unfair advantage. If you’re specifically talking about things like USAID that don’t provide any service to the taxpayer, then yes I absolutely think those should be replaced by individual choice on where to give charity and I can’t even fathom how anyone could think otherwise.“I can assure you that every revenue source has someone objecting to it. ”
OK, so? Plenty of people would object to any given private company, but they don’t all go out of business without the forced patronage of the entire country. What’s your point? If there’s a market for the good/service, it will continue to be funded. If not, it never should have existed in the first place.“So, we all can participate in a democracy and influence the policy, but can we simply cheat to avoid paying?”
I would be more than happy to give up participating in your sham democracy to be able to stop paying taxes, and I wouldn’t be surprised if most taxpayers would agree. The sway that consumers have on private companies through the free market is a lot stronger than the alleged power of your vote.“SS does not have to be a ponzi scheme – one generation pays, another receives.”
This is the definition of a ponzi scheme; the later investors pay, the earlier ones receive. Are you trolling?“only paid by sucking more suckers in.”
I.e. the future generations you’re referring to. You’re making it sound like you think ponzi schemes would work as long as nobody ever wised up. This is not true. The number of required “suckers” will inherently approach infinity. This isn’t a theory, by the way; it is well known and documented why ponzi schemes have to fail. Do you want me to explain it more, or can you just look it up?“B’H people live longer”
No, this has always been a red herring. Pyramid schemes mathematically don’t work. It wouldn’t matter if people always died 1 year after starting collecting SS.It’s gotta be hard trying to have a conversation with someone and having to wait a week for a response- I apologize for that.
Taxes are an unfortunate part of life. We both seem to agree that taxes in the US are unsustainable for many families. The problem though, is that many families would be better off if taxes were even higher (i.e. the ones not paying any taxes and living off of our taxes). There’s no general consensus on what’s too high and what isn’t.
I don’t think the government should be allowed to levy crippling taxes on anyone, but “crippling” is rather subjective. Who would be the one to decide what’s crippling and what isn’t?
There is a vehicle to lower taxes and make them more affordable- it’s your ability to go out and vote. Not paying taxes is taking matters into your own hands and things could get out of control if people could suddenly decide that taxes are too high and stop paying them.
And yes, I know we agreed to disagree on this but, in my opinion, an individual who cheats on his taxes because he feels they’re too high is stealing.
Are you mixing me up with someone else?
Who’s being held up and gunpoint and being forced to pay taxes. I’ve said numerous times in this thread that anyone who feels that the taxes are too high for the benefits of being a US Citizen is allowed to leave and renounce their citizenship.
The US isn’t a communist country and the US doesn’t own its citizens. Unless you’re in jain (and probably not paying taxes anyway) you’re free to leave. I have never written anything contrary to that.
Social Security didn’t have to be a Ponzi Scheme but it’s too late- that’s how it was set up and there’s nothing that can be done about it now.
See the case of Ida May Fuller- the first Social Security recipient- she barely paid into Social Security and collected it for over 35 years- receiving close to 1,000 times what she contributed. I highly doubt that I’m even going to get back even close to what I (and my employers) contributed. The funds that she collected were paid into Social Security by the next generation and their checks are being covered by our parents and us.
I spoke with a retirement actuary at length about Social Security and why it was purposely designed as a Ponzi Scheme and not as an annuity- like your typical insurance company would do it.
With a typical 401(K) a person sets aside funds (and at times their employer matches it to some extent) and at retirement they can either live off the lump sum or purchase an annuity and ensure that they don’t outlive their money. Of course the government is extremely on top of the employers issuing matches, the banks holding the 401(K)s and the insurance companies selling the annuities.
The amounts held in the portfolios of some of these banks and insurance companies is staggering.
The designers of Social Security were concerned with the government having access to retirement accounts- worth potentially in the trillions- and no oversight, so they designed Social Security in a way where there isn’t tons of money sitting around but payments come in from the current generation to pay the previous generation, i.e. a massive Ponzi Scheme. While Social Security does have lots of money at the moment- it’s nothing compared to the trillions they’d be sitting on otherwise.
As with any Ponzi Scheme, it’s going to fail sooner or later. From what I understand, the designers of Social Security anticipated that for each retiree there would be 16 people working and making Social Security payments. With people living longer, having less kids and with so many people choosing not to work- the ultimate demise is bound to happen sooner rather than later. But- it was going to happen eventually anyway.
Social security according to Warren Buffet is not a Ponzi scheme. Neither is it like a savings system to pay out later. It was sold as such, but it’s really a giant program where workers pay in and the elderly get that money. It used to be that old people were often penniless and sometimes left in the streets if none of their family could support them. Now they are usually well off. Not a bad result.
People do get more money from Social Security if they pay in more, but that is just to reinforce some fairness and to reward those who paid in more, up to a point.
The problem with people deciding to pay only what they think is fair is a) it’s against halacha. dinah dmalchusah dinah The only way a tax would be fair to evade would be if it was exclusively applied to Jews or levied by officials for their own benefit (corruption). b) If we would have that system of people only paying what is fair, there would be plenty of freeloaders benefiting from basic stuff like the army and police who say they don’t need them, but in actual fact would suffer a lot from their absence. Same with other spending programs. Basically a 65 year old who’s never paid into Medicare because they don’t think they need it or want to spend their money on other things- and yes there would be many people like this – would be left to die in the streets under the system where everyone pays what they want.
Re the person arguing about whether there’s a benefit to being American, you’ve got to be crazy if you think there is no benefit to being American.
Whether you need to pay taxes in North Korea or Somalia has no relevance to whether you should pay them in the US – there probably is no benefit to living in North Korea or Somalia, but, if you should have the misfortune to be stuck there, maybe you just pay taxes because otherwise you’re dead.Based on your post I’m having a hard time understanding why Warren Buffet believes that Social Security isn’t a Ponzi Scheme. Would you be able to explain what a Ponzi Scheme is, how Social Security works and contrast the two?
(Isn’t a Ponzi Scheme where people put in money and instead of it being invested it’s used to pay back people who put in money earlier and the people putting in money now hope to get back money at a future date from people who will put in money at a future date?)
I fully agree with you though that people shouldn’t be able to pick and choose which taxes they want to contribute towards.
Imagine the following:
911- 911, what’s your emergency?
Caller- there’s a fire in my house,
911- let me put you on hold while I check if you paid your fire fighting taxes…
Out of curiosity, those who mentioned Ponzi scheme – is this your own idea, and if not, where did you read this?
It seems that Milton Friedman mentioned this in a 1999 article (once in a NYT headline, that might not be his, and once “opponents call it a ponzi scheme”) – so more like a rhetorical device, and there are several articles in 2024 claiming it again and referring to Milton Friedman. The accusation is relevant so far as it refers to popular misconception that it is a pension plan and Algore’s “lockbox”. As a real thing, it is a program that pays elderly poor and collects a tax. Both payments and tax are structured in a way that middle class gets something, so they are not protesting this as a program for poor people the way medicaid is. I myself is for limited, especially federal, government, as I posted before. Here we are talking simply that a democracy has a way to determine laws and you either agree to the whole system or denounce your citizenship and move to another place. As I also mentioned, ideally there will be very limited federal government, and then you can simply move from Illinois to Indiana to get different social policies. As I think most here would agree, if they think soberly for a minute, that US is generally good to the population, Jews included. R Moshe Feinstein and numerous others hold same opinion. R Feinstein had what to compare with – he lived in Czarist and then Soviet Russia before coming to US.
JR87, I am also surprised how people who argue for tax evasion are not bringing any halachik authorities. I presume those inside in US might not publicize such psak for the fear of IRS audit, but I am sure there are lots of other poskim who could answer such a shailah.
“is this your own idea, and if not, where did you read this?”
It’s something that gets tossed around every time people criticize Social Security. It’s also just the observable reality. I’ll just echo what Dr. Pepper just said, can you really explain how a Ponzi scheme works, how Social Security works, and contrast the two? I’m failing to see the difference between “future investors (or suckers as you said)” and “future generations.” Even if you can morally differentiate (based on the axiom that everyone on the CR seems to hold by that everything the government does is morally just even when it would be wrong for a private citizen to do it), how can you mathematically differentiate?“I am also surprised how people who argue for tax evasion are not bringing any halachik authorities”
An academic point, but none of you have brought sources either. He brought the sevara of “dina malchusa dina,” and you brought Reb Moshe as holding that the US is good to the Jews. In any case, I don’t think there’s any evidence that this concept of “the halachah wants us to shill for the goyish government” ever existed until very recently, and I think your point about coming from Tzarist Russia tells us why. That generation genuinely thought that American politicians basically had a chezkas kashrus, that government organizations were held to a greater degree of accountability than private ones, that the democratic system essentially works and therefore working against voters’ interests would be political suicide, etc. On today’s standards, all of these ideas are almost universally dismissed as nonsense.Dr. Pepper:
“the US doesn’t own its citizens.”
Then why do people need to renounce their citizenship to stop working a percentage of their labor for free? Why would it be “theft,” as you called it, for people not to pay taxes unless you believe that the country intrinsically owns you or at least owns your labor?“911- let me put you on hold while I check if you paid your fire fighting taxes…”
Do you also support socialized healthcare, then? Or, is it somehow different when a 911 call is made for a medical emergency vs. a fire?“Re the person arguing about whether there’s a benefit to being American, you’ve got to be crazy if you think there is no benefit to being American.”
Such person does not exist. Copy and paste one quote anywhere from this thread in which anyone said that.“Whether you need to pay taxes in North Korea or Somalia”
This is a nonsense argument that “patriots” make that nobody should ever be allowed to critique or make suggestions for improvement for the US because it’s still better than alternatives. I get the “love it or leave it” concept for fresh immigrants, because it is essentially questioning why someone would come here in the first place if they’re just going to hate it and complain about everything, but for tenured American citizens, it’s absurd to imply we can’t criticize anything. Nobody is claiming the US isn’t the best option currently in existence, but that still doesn’t mean it can’t be improved.The US is a solitary outlier in the world taxing expat income earned abroad by citizens who are resident abroad.
Hard to see how Dina Demalchusa is relevant at all in light of that fact.With regards to the ponzi scheme….
Look up it’s definition!
Any fund that is dependent on the recruitment of new members to pay off the obligations to earlier one’s is a ponzi scheme.Bachur > US is a solitary outlier in the world taxing expat income earned abroad
Right, I think there are two issues here:
1) taxing on income earned abroad – here US seems to be an outlier, although citizens of other countries get into same situation, maybe during a transition year or due to specific job arrangements.
2) double taxation when a citizen in one country and resident in another – so a lot of countries have income treaties that allow offsetting one income tax v. the other.For US, see IRS rules for foreign earned income exclusion. I see that it has a limit of $125K though …
This explains why the discussion here was about social security tax and not income tax. But, as we discussed, paying social security tax entitles you to receiving social security benefits, however uncertain they are.
But the bottom line – it does not matter whether US is different here from other countries. dina dMalchusa does not mean that you only follow the laws where they coincide with worldwide practices, Gemora conclusions, or your own feelings. A reasonable country, whether democracy or not, establishes rules. This clearly applies to modern democracies, including USA. In some cases, these rules can be very oppressive and discriminatory against Jews. That may allow for some deviations. Consult your local Russian or Chinese Rabbi for more details.
Bachur, Ponzi scheme can maintain the illusion of a sustainable business as long as investors continue to contribute new funds, and as long as most of the investors do not demand full repayment or lose faith in the non-existent assets they are purported to own.
The key here is the fraud. Social Security rules are not hidden. It is true that various politicians and media use misleading descriptions that creates the wrong impression and can be seen as Ponzi. It is a feature of free speech in US that it is up to consumer/voter to figure out who is right. It is definitely not how a Jew should talk.
You asked who mentioned Ponzi scheme?
If A = B and C = B, would you say that C = A?
Now-
Let A = Ponzi Scheme,
Let B = A fund that people contribute money towards and instead of the money being invested it’s used to payout people who contributed money earlier on, and
Let C = Social Security.
Do you agree now that Social Security is a Ponzi Scheme?
If you want to be technical you could say that mathematically it’s a Ponzi Scheme but legally it’s not because (1) a Ponzi Scheme is illegal and Social Security is legal and (2) a Ponzi Scheme isn’t transparent where the money goes but Social Security is transparent for who ever cares to read up about it. But you get the point.
The fact that a US Citizen can renounce their citizenship is enough proof that the US doesn’t own its citizens. There needs to be some sort of cutoff to know when one is no longer a citizen. Would you like taxes to be like gym membership where once one no longer pays they’re no longer members and no longer entitled to the benefits of membership? And yes, it would be “theft” to continue using the gym (or any benefit associated with membership) after membership has been revoked.
I’m a member of כלל ישראל, this is a different type of membership as there’s no way to renounce my membership. B”H when the בית המקדש is rebuilt and בתי דינים are established- I’m going to be under their jurisdiction and there’s nothing I can do about it. In this case I’m owned by the religion.
On the other hand- I have professional memberships- I met the requirements, applied for membership and pay my dues (which includes a fee for a disciplinary process if anyone files a complaint against me). I’m not owned by these organizations but there are benefits to being a member (e.g. I can use their professional designations after my signature). Even if I stop paying membership I’m still bound by their rules until I officially resign and can face their disciplinary process and have my name listed as not being in good standing.
I’m not sure what you’re getting at with socialized healthcare but if given the option to opt out socialized healthcare a 911 operator would first have to place someone on hold to see if they paid the socialized tax.
“Ponzi scheme can maintain the illusion of a sustainable business as long as investors continue to contribute new funds, and as long as most of the investors do not demand full repayment or lose faith in the non-existent assets they are purported to own.”
So, to be clear, you think Ponzi schemes would work if there were a continuous flow of new investors, like if new people could be coerced into joining? You’re objectively wrong, but I would still like to make sure this is what you’re saying. The mathematical proofs for why ponzi schemes have to fail are readily available and understandable to most halfway educated individuals.“The key here is the fraud.”
So, if I start a Ponzi scheme and make it clear that it’s a Ponzi scheme and that there is no underlying asset, that would be okay? Because that’s exactly what Social Security does.“It is definitely not how a Jew should talk.”
No, according to the posters here, apparently a Jew’s tongue should always be so firmly pressed against the bottom of the government’s boot that he should not be able to speak.You have provided no evidence that SS is not structured as a Ponzi scheme. You have continuously asserted that the only reason anyone would question government is if they are “misleading.” You do all this while shamelessly pretending to be a proponent of small government elsewhere. Either just man up and go full on authoritarian or not. Your nonsensical incoherent mix of contradictory ideas is embarrassing to read.
“dina dMalchusa does not mean”
Give me a proof that it means you have to follow the laws of another country in which you don’t even live.So, if I start a Ponzi scheme and make it clear that it’s a Ponzi scheme and that there is no underlying asset, that would be okay? Because that’s exactly what Social Security does.
Social Security is not a Ponzi scheme.
In a Ponzi scheme, when the incoming funds dry up, the initial investors lose.
In SS, the incoming funds are government mandated so won’t dry up, and if necessary, the government would back it with other funds.Also, in a Ponzi scheme, if the investors decide to withdraw too quickly, the scheme falls apart. With SS, they can’t “withdraw” more than the regular payment.
Give me a proof that it means you have to follow the laws of another country in which you don’t even live.
This is a good point
Government mandated or not- if the funds coming in are not enough to payout the funds due the entire system will collapse.
The shortfall is projected to be in the trillions of Dollars. Where is the government going to get this money from?
AAQ I’d love to see a mekor that DDMD applies outside of the borders of the particular malchus, especially when those dinim are not international norms.
What would you say if the US passed a law that all people named moshe in the world need to pay a special moshe tax… so all the moshes living in the Uk, france, Switzerland etc need to pay the tax bec of DDMD?Asides from that, DDMD is a halacha with clear gedarim when and where it DOES apply, and when it doesn’t. Not every law passed by a country comes under its chiyuv
Neville & Daas
>> “dina dMalchusa does not mean”
> Give me a proof that it means you have to follow the laws of another country in which you don’t even live.I am not sure what the issue is: being a US citizen obligates you. You can stop being a citizen at any time. If you were a Soviet Jew behind the iron curtain, then you would have an argument not to follow their laws until they open the borders! Maybe one needs to look closer at igros Moshe and other responsa to see if they give an exemption if you are out of the country.
Here are a couple of relevant sources:
https://www.yutorah.org/ lectures/889411/Expatriate-Taxation-in-Halachah
https://en.globes.co.il/en/ article-new-immigrants-will-need-to-report-income-and-assets-abroad-1001472163My explanation why SS is not a Ponzi:
SS is (1) a tax and (2) payments to elderly.Both are structured in certain way to make it attractive to the voters. For example, SS pays non-poor so that voters do not revolt. Despite that, Congress/President can vote new formulas for SS or eliminate it completely at any time. There is no lockbox, don’t believe Al Gore.
You seem to be confused only because you typically pay this tax when you are young and get returns when you are old. Similarly, you pay medical insurance when you are healthy (and typically young), and get money back when you are sick (and typically old). So Ponzi is in your head and maybe you can blame politicians and newspapers for confusing you.
Your real concern is the “shortfall” – that SS is “losing money”. Something will need to happen due to, B’H, people living longer and, unfortunately, people having less children. It will be up to the voters to decide – increase age, reduce benefits, etc. Like everything else in a democratic country.
Bachur > Not every law passed by a country comes under its chiyuv
absolutely, I listed some above. None apply here. And, again – these laws apply to US citizens, not to anyone in the world.
I’m trying to figure out where the disconnect is.
Are you opining that Social Security isn’t legally a Ponzi Scheme or isn’t mathematically a Ponzi Scheme (or it isn’t either)?
I am not sure what the issue is: being a US citizen obligates you.
The issue is proving that assertion. Restating it doesn’t provide proof.
https://www.yutorah.org/ lectures/889411/Expatriate-Taxation-in-Halachah
Are there any sources there which address this question?
Government mandated or not- if the funds coming in are not enough to payout the funds due the entire system will collapse.
Maybe. It’s still not a Ponzi scheme, even if it’s not going to last.@philosopher
You clearly missed the jokeBut, the point is, he shouldn’t be publicizing this
Point being?
At best you have R Ziring theorizing that the mere holding of citizenship is enough to call you a shutaf in the country…
The pashtus is very clearly not that way
Daas,
there are several points in the lecture:
1) idea that you are a shutaf in the country and this clearly applies to those who actively participate – go back to the country, file taxes when they can get child credit. He is less sure if you left forever or even a citizen who was born in another country. He asked R Schachter and he was not sure, and he says some other anonymous rav thinks that this binds. I personally think that any conscious person who is aware of the laws can make an effort and denounce his citizenship if he really wants to.
2) one reason for dina d’malchuta is that government has a legitimate power over us, not necessarily democratic (see sources below). He quote a case of a Canadian court recognizing extradition request of the US citizen who owned just 8 mln dollars in US taxes. US can also fine bank accounts via international treaties. So, they definitely have that power and you should submit instead of waiting for Musk to uncover your account. By this theory, there seems to be a limit: if you move forever to North Korea outside of US treaties, you don’t have to pay US tax forms
3) in the last 5 minutes, he addresses the accountant problem. He seems to suggest that you at least owe your client an explanation and encouragement to file the forms and pay if anything is due.here is from PDF attached to that lecture:
Responsa of the Geonim (Asaf) #66 (Less extreme in Ramban and others) ונתויווג לעו’ :בותככ ,לארשי וליפאו ,םנוצרכ וב טולשל םדא ינב ןוממ לע ןטילשה ךכ ,ומלועב תויוכלמה תא ה”בקה ‘םנוצרכ ונתמהבבו םילשומ טילשה רשאכ יכ When G-d gave power to the kings in the world, he gave them control of people’s money, to control them as they will, even those of the Jews, as it says “over our bodies and our beasts as they please.”10. Rabbi Shimon b. Aderet (Rashba), Nedarim 28a איה ולש ץראהש םכתא שרגא יתוצמ ושעת אל םא והל רמא יצמד םושמ Because he can say “if you don’t follow my commands, I will expel you”, for the land is his.
Dr Pepper > Are you opining that Social Security isn’t legally a Ponzi Scheme
Maybe we are confused by the term itself. Geniva daas is illegal. Taxing young generation to pay for older generation is not illegal, but even be a mitzva under Kiddushin discussion about respect to zakenim (especially after they make eligibility age halachik 70 🙂
Or, maybe the power of the government makes Ponzi scheme legal? After all, if I personally come to you and “tax” your income 10% under a threat of my gun, it will not be legal. But the government can do that.
Bachur,
this is part of the discussion. Shutaf works for democracies and he is not sure as you are whether holding citizenship is enough. I am not sure why.
Say, you and I open a partnership and there is a clause that one can leave the partnership and stop paying his part of the mortgage. Then, if I choose to move to another country but not formally leave the partnership, I would be obligated to pay. Same with marriage – can you leave without a get and let her figure it out that you are not interested any more?BUT, he also has a 2nd part about power of government that applies to kings and dictators – that we lived under for centuries. Then, the fact of international treaties that US can use to get you or you bank account matter also.
I try to respond to everyone who comments on what I write. To make it easier for me would you be able to explain why Social Security is not a Ponzi Scheme?
If someone is wearing a CVS branded bandage they’re technically not wearing a Band-aid. So, even though it looks like a Band-aid, feels like a Band-aid and works like a Band-aid, it’s still not a Band-aid.
Do you feel the same way about Social Security? Even though it looks like a Ponzi Scheme, functions like a Ponzi Schem and is destined to collapse like a Ponzi Scheme it isn’t a Ponzi Scheme because it’s legal and transparent?
What was unclear?
If you want, I can tack on more factors which distinguish SS from a Ponzi scheme.
The actual collection of funds is a tax, which the government can levy by legal force, as opposed to a Ponzi scheme where monies being “deposited” are volunteered.
In a Ponzi scheme, the purpose of payouts is to keep the scheme looking legitimate. In SS, the purpose of the payouts is provide assistance to the recipients.
I’m sure I could come up with more, but don’t think I even needed to add these…
Dr Pepper > Even though it looks like a Ponzi Scheme
let’s separate facts from gnevas daas:
1) social security is a pension program that collects taxes from working people and pays to older people.
it is legal because it was enacted by a Congress and signed by a President.
it is reasonably logical because it reflects respect to older people that we all stand for.
it is fiscally responsible because it is paid from current funds.it is not an only possible solution.
one possible solution would be to limit this pension program to only poor people.
another – to pay everyone in the country equally.
another – leave it to the states.2) it was not easy to enact in a country that was designed to make big changes difficult and where there is a culture of independence.
So, it was designed to include non-poor people and make it popular among middle class.
Either initially or eventually it was popularized as an “investment”3) if you presume that your children will not be cruel to you, then it will exist is some form in the future
@always_ask_questions and @daas-yochid
I’m not questioning the legalities of Social Security, I’m not a lawyer and don’t have an opinion of the legalities one way or the other.
What I wrote earlier on is that Social Security is designed like a Ponzi Scheme and is destined to fail like all Ponzi Schemes eventually do. (Regardless of whether it’s technically (or legally) a Ponzi Scheme or not.) It may last longer than other Ponzi Schemes do but if early contributors already got payments equal to many times more than they contributed- then there’s going to be a time where the payments coming in aren’t enough to make the payments promised to later contributors. It’s being exacerbated now when people are living longer, having less kids and many of the younger generation are never entering the workforce altogether and therefore not contributing to the fund.
You asked what was unclear- I’m trying to get an answer from you as to why you feel that Social Security isn’t a Ponzi Scheme. Can you pick from one of the choices below? (For context I would choose B.)
A. Social Security doesn’t rely on future contributions to make payments for past contributors,
B. Social Security is legal while Ponzi Schemes are illegal,
C. Both
D. None of the above (please explain)
I respectfully disagree with many of your “facts”. Before discussing them individually- would you mind answering the multiple-choice question I posed to @daas-yochid?
E, F, G, and H.
B is also true.
So it’s not a Ponzi scheme, despite A.
My answer is A. Social Security is paid by current taxes.
You hope that future generations will be as generous to you as you were to the previous one. Of course, to quote a joke, previous generation won WW2 while the current one was challenged to sit on the couch to avoid a pandemic – and failed at that. It is now asked to defeat North Korean soldiers in Ukraine running without fire support and we are still on the fence. So, how are we sure that the next generation will respect us and pay taxes to support us? But I digress.
What _bothers you_ – is how social security is presented by media and politicians. And maybe it was like that from the beginning, maybe someone is better on history lessons here. These sources are convincing you that you have a helek in your social security taxes and then you are afraid of Ponzi scheme – because people live longer and population is not increasing fast enough.
First, life expectancy at 65 is not currently increasing, hope you are happier now 😉
SSA numbers: 2000: men 82 women 85, 2010 men 83, women 85, 2021 men 82 women 85Second, each generation has their own challenges: somehow next generation will address how to deal with poverty. As productivity increases, then pensioners of the future would presumable fair better than previous. Even now, they are watching netflix, skype their einiklach, and read books on kindles. Beats what existed 50 years ago. So, have some bitachon, pun intended.
My answer is A. Social Security is paid by current taxes.
I think we are understanding A differently
I was trying to have a normal conversation with you. I don’t have the patience to deal with someone who can’t give a coherent answer to a simple multiple choice question.
I probably won’t respond to further posts from you on this thread.
Sorry
Here’s where we disagree:
Social Security does rely on current taxes to make current payments- this is exactly how it follows a Ponzi Scheme. Had the Social Security taxes been put towards an annuity for the tax payer- then current payments wouldn’t be paid out by current taxes, it would be paid out by the payments that were previously made (and hopefully invested responsibly).
(But then early recipients wouldn’t have been able to collect hundreds of times the amount they put in.)
I’m saving towards retirement with the expectation of not getting anything from Social Security, if I do end up getting something it’ll be a bonus. I don’t like that they keep raising the wage base so much every year. (But as a friend pointed out- it doesn’t make a difference because we’re not going to get what we’re owed anyway.)
It doesn’t really make much of a difference now what the life expectancy is- check what it was back when Social Security was enacted and see how many more year’s early recipients received payments than was originally expected.
You asked how are we sure that the next generation will respect us and pay taxes to support us? If I was given a choice to forgo any payments from Social Security and in turn my kids won’t have to pay into the system, I’d do it in a second.
Not sure where that came from.
I’m saying it’s not A, B is true, but there are other differences as I mentioned in previous posts.I can distill the differences to one simple idea.
SS and a Ponzi scheme are very different transactions.
SS is a tax used to pay retired people (and other non workers eng. due to disability). Nobody is paying in under false pretenses, they are simply being forced to pay a tax.
In a Ponzi scheme, people are misled into thinking they are investigating in a legitimate business or fund which is actually not occurring; rather, some of the $ is going into the pockets of the people running it, and some pays off previous “investors” just to keep the scheme from being exposed for as long as possible.
Social Security does rely on current taxes to make current payments- this is exactly how it follows a Ponzi Scheme.
Ok, but the similarity pretty much ends there (in your opinion there’s another similarity that they’re both doomed to fail, but I disagree)
Against my better judgement I’ll explain where that came from.
In post #2366867 you wrote that “It’s still not a Ponzi scheme, even if it’s not going to last” but didn’t explain why.
In post #2367605 I gave the parable of a band-aid verses a bandage and asked if you feel the same way about Social Security? Even though it looks like a Ponzi Scheme, functions like a Ponzi Schem and is destined to collapse like a Ponzi Scheme it isn’t a Ponzi Scheme because it’s legal and transparent?
I thought it was a simple question- do you agree that it’s like a Ponzi Scheme (i.e. current payments pay prior liabilities and current liabilities will hopefully be paid by future payments) but technically isn’t one because Social Security is legal?
In post #2367699, instead of answering my question you asked what wasn’t clear. And then in post #2367703 you mentioned some more reasons why it’s technically not a Ponzi Scheme but still didn’t answer my question.
So, in post #2368218 I left a pretty simple multiple-choice question which your response in post #2368385 seemed to imply to me that you weren’t interested in having an intelligent conversation.
Did you see posts #2366100 and #2366104?
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