NationStates Jolt Archive

Very few people realize that social security itself, is a pyramid scheme and will ultimately cause the lose of money of a government then eventually collapse in a very distant future.

The definition of a pyramid scheme is a non-stable business model that involves exchanging huge amount of investment in order to be a part of the scheme and the participants will be able to receive money through recruiting process. No product or service is provided in a pyramid scheme and the revenue is 100% generated through the contribution of new participants.

In social security, US citizens are automatically enrolled in the program once they are able the work and continue to contribute money to their upper lines. After the upper lines are dead, the younger generation becomes the upper line and start to collect the money from the bottom.

And in social security, no service or product is provided. Revenue solely came from the bottom. It fits every definition of a pyramid scheme, which is outlawed in the US.

The reason why illegal pyramid scheme usually collapses in few years and US social security stands very long, is because that US social security has the power to force every citizen to participate the program therefore the base of the pyramid will always be big enough to support the top of the pyramid.

However, keep in mind that in most of advanced countries, the birth rate and death rate are both low, which will eventually lead to a reversed pyramid--huge top and small bottom. And when it happens the bottom generations will not be able top support the top. They will either be forced to pay increased the investment, or the scheme will collapse.

It is very clear that in a very long-run, social security will continue to bring financial burden to this country and need to be stopped.

Yeah, it does kind of suck. Personally, I'd put that money in to the military and science funding, but that's just me.

Yep, it's the wrong idea, at the wrong time, in the wrong place.

I got my statement the other day. If I wait until I'm 72 to retire, I'll get a niggardly $2400 a month from my government. If they're lucky, I'll die a couple years later and never withdraw all that I've put in.

My wife, on the other hand, is a teacher. She doesn't have to put any money into SS. So we put that 6.5 percent that would be withheld from her paycheck into a 403b account.

Care to guess who gets more money when they turn 72?

Yeah, it does kind of suck. Personally, I'd put that money in to the military and science funding, but that's just me.
I thought you were smarter than that. That's 6 1/2 percent of your money!

By the way, I thought the "Mistake on the Lake" referred to Cleveland Municipal Stadium. I watched a few Indians games there and I got to see the Stones concert in 74?

my husband recieved his ss letter the other day and also our 401K report.
guess which one is better?

I wish we could take all our $ and invest it ourselves, we seem to be doing fine.

Holy shit, Serapindal, you didn't copy and paste. Yay!:)

my husband recieved his ss letter the other day and also our 401K report.
guess which one is better?

I wish we could take all our $ and invest it ourselves, we seem to be doing fine.
The best thing about November and December is that I quit giving to SS. Then my 6 1/2 percent goes to my Roth IRA.

Holy shit, Serapindal, you didn't copy and paste. Yay!:)
S/he is coming of age! I'd throw a party, but it is probably nicer not to spam a sensible thread with good potential for debate.

That's why Bush proposed the reform to the SS Plan. If people instead put the money in a personal retirement savings account the banks would be happy and people would literally get their moneys worth back out of it.
Even in history class the Social Security Plan was enacted to help people during the Great Depression who hadn't saved for retirement and for those who really needed it like poor families. Now, though, were out of the Great Depression ppl think that they'll be able to retire by simply putting money into SS and ppl abuse SS to a point where the people who need it underweigh the ppl who steal from it.
SS should be sacked, quickly.

The best thing about November and December is that I quit giving to SS. Then my 6 1/2 percent goes to my Roth IRA.

I wonder if I'm a sick bastard, but whenver I think of SS, I think of the Schutzstaffel. Maybe it's because of my SS uniform in the closet... >_<

I thought you were smarter than that. That's 6 1/2 percent of your money!

By the way, I thought the "Mistake on the Lake" referred to Cleveland Municipal Stadium. I watched a few Indians games there and I got to see the Stones concert in 74?

Naw, I was just kidding.;)

Personally, I'd provide investment options in Treasuries; they're safe and have a higher rate of return, and a small percentage of the interest paid would be collected as tax for the fund. Or, you could invest it yourself and pay a tax. Either way, it would be less than you pay under the current system.

"Mistake On the Lake" used to mean the stadium, but given how bad things have gotten in Cleveland (Poorest City in America 2004!), it's spread to the entire town.

Ha ha ha. Very distant future. We all wish. More like within the next 100 years; probably in most of our lifetimes.

"Mistake On the Lake" used to mean the stadium, but given how bad things have gotten in Cleveland (Poorest City in America 2004!), it's spread to the entire town.
[hijack alert]
I've always liked Cleveland. Between Cleveland, Akron, and Detroit, there were a bunch of really good musicians that came out of there in the 70's and 80's. When we were getting the BeeGees on the radio, you could see Pat Benatar and the Pretenders in Akron.

The best thing about November and December is that I quit giving to SS. Then my 6 1/2 percent goes to my Roth IRA.
we pay out the first 2 hours of work everyday into investments. we are working on our budget to do more. Roth IRA's rock :D as a tax advisor I recomend that everyone who is eligable get one, it is a very flexible investment account and has awesome tax advantages.

The only reason we have a 401K also is because the company matches and that is like free money!:)

Yeah. It was a good idea when people used to die two months after retirement. But now the gits are living longer, much longer, and the model can't be sustained any longer.

Chile has had good results with their model, though, in which the social security contributions are manages by private investment funds and you choose on which one to put your money.

So, there are alternatives.

In my humble opinion, the point of Social Security being "a pyramid scheme" is made by people who want to see pyramid schemes as Social Security.

[hijack alert]
I've always liked Cleveland. Between Cleveland, Akron, and Detroit, there were a bunch of really good musicians that came out of there in the 70's and 80's. When we were getting the BeeGees on the radio, you could see Pat Benatar and the Pretenders in Akron.

I agree, I've lived up here for 10 years; it's only become really bad over the past 5 or so. Things were pretty good in the early 90's.

Yeah. It was a good idea when people used to die two months after retirement. But now the gits are living longer, much longer, and the model can't be sustained any longer.

Chile has had good results with their model, though, in which the social security contributions are manages by private investment funds and you choose on which one to put your money.

So, there are alternatives.
The hell with Chile! Galveston rejected SS in favor of a market based retirement system. The retirees, there, get a bigger paycheck on the day they retire than they did when they were working.

Then there's the federal civil service retirement system. How many of our Congressmen and women do you think pay into Social Security? Zero. But it's okay for the rest of us.

In my humble opinion, the point of Social Security being "a pyramid scheme" is made by people who want to see pyramid schemes as Social Security.
Do you believe that a corporation like General Electric, or Johnson & Johnson could set up a retirement plan like Social Security and expect that it would be legal?

Do you believe that a corporation like General Electric, or Johnson & Johnson could set up a retirement plan like Social Security and expect that it would be legal?
Social security follows the same principle everywhere. Otherwise, insurance companies would be pyramidal for sure.
Cause that is what happens, see: some of us die. And if we don't, we still live for less time than we've invested.

As pointed out in the previous post, insurance is a pyramid scheme also.

As for investing in stocks, bonds or securities, read some history. Even that is a gamble. If people were allowed choice, and many didn't contribute to Social Security, it would collapse, of course. The wisest course is to invest by diversifying, plus contributing to SS.

Social Security is a "security blanket". It will catch you if you lose in the investment market, go bankrupt, face a catastrophic illness, or for those at the lower rung of the economic ladder, who can't invest, it will give them some income survivability.

People just don't seem to think beyond their present circumstances.