Trump has
vowed to leave Social Security intact and he is correct, As the US economy
declined, more citizens were dependent on their parents and grandparents for
support. Those citizens who made their money from the 1950s to 2010 did well
and many own their own homes. When their
children and grandchildren need shelter, they go to live with their parents or
grandparents. Retirees have been the
primary support for their children for decades and they still are. As the economy recovers and jobs come back
for their children, many these children will be able to rely less on their
parents and grandparents. This should take several years if we are lucky. But Social Security is a fragile beast and
needs to be put on a sounder financial footing very carefully.
Social
Security was established in 1935 to provide a small retirement fund for
Americans over age 65. In 1935, the
average life expectancy of adults who had survived childhood was age 65.
Citizens
were required to contribute a small portion of their earnings to their Social
Security Account and Employers were required to contribute a match and send it
to the federal government.
In 1937
employees and employers were each required to contribute 1% of the employees
first $3000 in gross earnings. This rose to 7.65% of $51,300 by 1990. By 2017, the earnings were based on the first
$127,200.
Social
Security collects a little over $1 trillion a year and pays out a little less
than $1 trillion a year. It is a Ponzi scheme. It is also a “defined benefit”
plan. When you die, your spouse continues to receive half of your monthly benefit
until she dies, then is stops.
Social
Security could have been established differently. It could have required
employees and employers to contribute, but it could have establish personal
accounts to send these contributions to.
This would have been the first “defined contribution plan”. Like todays’ 401K, your personal account
would belong to you and you would choose how to invest these funds. They could have remained tax sheltered.
Payments
would have gone to Banks and then invested and not to the government to deposit
in the general fund. Congress would not have had the chance to spend the money.
When you retired, you could withdraw what you needed. When you died, the account could go to your
spouse. When she died, the account could
have gone to your children.
The
difference between these options amounts to an extra $1 million, because the
$500,000 you and your employers contributed would have tripled. Instead, you
contributed this $1 million to the government for Congress to spend instead of going
to your own children.
There are
Americans who have made maximum contributions to Social Security, but died
before they were age 65. There are also
spouses who died early. Their money went to the government to redistribute.
There are younger Americans who don’t believe they will collect Social Security
themselves.
The
government believes that Social Security is “old age insurance”. They don’t see
it as your retirement plan. This is one of those “fast and loose” scams
Congress continues to defend, because they don’t want to admit that it will
eventually implode. They certainly don’t intend to make these payments from the
general fund without your children’s money. They would have to spend an extra
$1 trillion a year out of the general fund for about 30 years until the current
Social Security recipients die. This
would allow younger Americans to transfer to private accounts.
This
money is deducted from your children’s paychecks and sent to you monthly. Those
retirees who have no children receive their money from other people’s children.
We had 6 children during the overpopulation panic in order to save Social
Security.
The
“greater good” here was the redistribution of wealth away from families. There
are “unintended consequences” with all government programs that are
unconstitutional, because they are unsustainable.
Norb
Leahy, Dunwoody GA Tea Party Leader
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