- Politics and Social Issues
Social Security and Medicare Along With Obama Care Are Just Taxes
Even President Trump has not addressed the real problems of the Democrat Created "Entitlements"
The inherent problem of these so called Entitlement programs of Social Security, Medicare and Obamacare is that they were never implemented to be more than a tax.
Or what I like to call, waiting to die retirement.
Social Security was never implemented to cover the benefits stages. Unlike a pension plan such as the defined benefits plan given to all federal employees, Social Security is vague and ambiguous.
The age of retirement keeps moving, from 65 years old, to 68 years old today.
There is no cutoff of having to contribute into FICA. As long as a person earns a wage they must continue to pay into FICA. That is more consistent with a TAX than a retirement system. And this is true even while on SS benefits.
The entire entitlements program is not only not vested, it lives and dies at the will of the congress.
Goal of this article
- To look objectively into the Social Security Act from 1935 when it was passed until today when it is convoluted and still not funded to keep solvent.
Social Security Act and its additions over the years till today has turned the possible good intentions of president Franklin Delano Roosevelt into a PONZI Tax Scheme that has burdened the business and the people.
Don't confuse the dependency of people to rely on the Social Security and the United States Welfare system with an actual useful benefit.
- It is more accurate to compare the US Welfare System with a Drug Dealer giving free samples to bring in new business.
- Once hooked on the drugs the drug user can't live without the drug.
- That is not a benefit or a good thing. It is just the nature of the beast.
Of course the government doesn't give free samples, but the rest of the analogy works.
While it is not mentioned in this article, there is also the absurdity of the Social Security Retirement.
1. The new people coming into the FICA wage earner TAX are 18 or younger. That means that they will have to pay into FICA for SS until they are 62 for a partial benefit or 68 for a full benefit. But by the time they are 68 congress could have raised it to 70 and over.
2. Government workers Retirement (FERS) vests, while SS doesn't, it is the whim of Congress to whether it even exists.
- There is no vesting of SS.
- FERS is only 20 years to retire. Many government workers are retired even before the age of 55, and certainly by the age of 60.
- SS is 68 for the new people and if they get a supplemental job while they are on SS benefits the government makes them contribute back into SS. How does this make sense? When government employees retire under FERS, they never have to contribute to that retirement benefit.
- SS is managed or mismanaged by Congress while FERS is privately managed.
- FERS benefits are defined at the beginning while SS is determined by congress.
- Government employees retire when they are still young enough to enjoy life. SS retirees are waiting for God, or a doctor.
Some Things about US Social SecurityClick thumbnail to view full-size
The United States Government has been involved in wars and social micro managing
For the purposes of this article, I will skip the gory details and look at the philosophy of the government programs. Specifically, the target of this article is the United States Social Security Program, which was the idea and creation of president Franklin Delano Roosevelt.
- Affectionately known as FDR, he proposed a social system during the great 1929 Untied States Depression. This would be called the Social Security System but since its passing as a law in 1934, it has become much more and accomplishing much less.
The Social Security Act
The Social Security Act was actually signed into law on August 14, 1935 by president Franklin Delano Roosevelt.
- This act focused on the elderly, but it is tenuous to conceive how this was any help for them during the depression. Twenty seven percent of the US people were unemployed during the depression. The depression in my opinion was not helped by any of the social programs initiated and implemented by president Franklin Delano Roosevelt. The depression started in 1929 and end in 1941.
In my opinion, it was the war that started on December 7, 1941 that eventually ended the depression in the United States.
- And it was the end of the war that started the decade of the 1950s United States prosperity. Probably the last era of prosperity in the United States. The times of flowing money and spending by the people after the 1950s were the result of artificial pumping of the economy due to economic bubbles like the dot com bubble in the 1990s.
The problem with artificial bubbles is they have no real foundation and they eventually bust, leaving behind a sick economy.
Social Security could it have been done better?
Setting aside the bypass to benefits from the current Social Security System given outside of the Retirement benefit, what has the Retirement benefit done for the people.
1. The original age for retiring on the Social Security Act was 65 years of age.
Today we are seeing this pushed slowly but surely towards 70 years of age.
- So the people in 1935 that were mandated to participate into the Social Security TAX System would not be able to retire normally until they were 65 years old.
- There would also be a minimum number of years to qualify for getting any of these benefits.
- Say that the average worker in 1935 was around 25 years old, they would have to wait 40 years to Retire under the Social Security System.
- How does that help them during the depression, when jobs are scare?
The Social Security System was posed by president Franklin Delano Roosevelt as a National Welfare System that included Unemployment Benefits.
- In Reality it was a TAX, and later United States Supreme Court Cases would verify it as a TAX.
The Social Security System of president Franklin Delano Roosevelt is really a United States Government PONZI scheme.
- It requires a huge younger group of workers to to contribute the funds into the Social Security Fund to pay for the smaller group of older workers that are close to retirement age.
The PONZI element is that now 82 years later the tide is turned to where there is a large number of older people that are going to retire or already have retired. There just isn't a appropriate number of young workers entering the workforce to keep the fund solvent.
- The other interesting aspect is that Social Security mandates that the Employer make contributions matching those of the Employee.
- In addition, the Employer is responsible for the bookkeeping and the payment of these withheld Social Security Contributions to the US Treasury.
In 1935, the Social Security Act didn't apply to All Workers, or even All Wage Earners.
For example, they didn't include Government Workers or School Teachers.
- But overtime the PONZI effect of the Social Security System needed an influx of more workers contributing to the System to pay for the increasing numbers of people that were retirement age.
- That is why they have inched up from the original age of 65 years old towards 70 years old.
The first Social Security Taxes were collected January 1937 With first 1 time, lump-sum payments also made that same month. Starting January 1940 there were Regular ongoing monthly benefits.
Social Security Act and additions to it.
Under the 1935 law, Social Security only paid retirement benefits to the primary worker.
- In 1939 survivors benefits and benefits for the retiree's spouse and children were added to the law.
- Disability benefits were added in 1956.
I mention this because this article is focused on the original benefit as a Retirement for the primary worker.
The PONZI weakness starts in 1984
In 1984, All members of Congress,President, Vice President, Federal judges, and most political appointees, were now contributing the Social Security program.
So, it looks like after skipping out 47 years, the Social Security PONZI scheme sucks them in like the rest of us. But, don't feel bad for them, because they have in addition to Social Security the Federal Employee Retirement System.
Federal Employee Retirement System 1984, and activated in 1987
The Federal Employees Retirement System (FERS)
- US Civil Service FERS - Jan 1, 1987
- FERS replace a previous retirement system.
- It is an Annuity having a , a defined benefit plan,
- That plan means that there were never be any less benefit for the employee regardless of the economic conditions. The Benefit is Defined in the beginning.
- Unlike Social Security which can not only be lowered, but it can even be eliminated by Congress.
- FERS also includes a 401k like plan called a Thrift Savings Plan (TSP), a defined contribution plan
Why wasn't this type of plan created for the private sector employees?
How is it that the Public SERVANTS can have a better Retirement System than their MASTERS the American People?
- If we applied are FICA contributions and the matching ones from our Employer and put it into a Defined Benefits 401k wouldn't we be better off than under the Social Security System.
- In any case, the Employee contribution is the same, but that is where the FERS and SS diverge.
- In the next section, if there are enough comments, I will go over these major differences.