Let's talk about Social Security and a hypothetical lawsuit

[HIJACKER]

We all know the system is screwed up. For those of us in the age 20-40 bracket, odds are - it will no longer be a system that we can depend on and HOPEFULLY everyone is planning retirement accordingly using the worst case assumption that Social Security will not be there by the time we reach retirement. Furthermore, this is a system we have no choice to contribute into by law, and we are taxed accordingly.

My question is - WHY is this not a choice? Why MUST we pay into a system that is failing? Has anyone ever considered the possibility on doing a very large class action lawsuit against the SSA in order to receive a refund of those funds we each have invested and have the choice to "opt out"? Reality is, social security is a ponzi scheme, isn't it?

Just wondering what everyone's thoughts are on this hypothetical scenario...

 

[Miner]

We all know the system is screwed up. For those of us in the age 20-40 bracket, odds are - it will no longer be a system that we can depend on and HOPEFULLY everyone is planning retirement accordingly using the worst case assumption that Social Security will not be there by the time we reach retirement. Furthermore, this is a system we have no choice to contribute into by law, and we are taxed accordingly.

My question is - WHY is this not a choice? Why MUST we pay into a system that is failing? Has anyone ever considered the possibility on doing a very large class action lawsuit against the SSA in order to receive a refund of those funds we each have invested and have the choice to "opt out"? Reality is, social security is a ponzi scheme, isn't it?

Just wondering what everyone's thoughts are on this hypothetical scenario...

Much like taxes, and now the federal health care mandate, SSA is a federally mandated program that some people still don't pay into, such as teachers and railroad workers.

I'm not sure SSA is a ponzi scheme as much as it is a program that relies on a fairly consistent population growth. I doubt the founders (during the depression) envisioned the baby boom and the bust. I'd suspect that just after WWII the math was looking great with all the war dead and the rebuilding.

Since the US looks like it's going to default in 2 weeks, I'll reserve further comments after the economic meltdown and subsequent revolution.

But I've been drinking most of the afternoon and since this is a hypothetical situation, I'll throw that out there.

Miner

 

[sahtt]

It doesn't fit the mold of a ponzi scheme perfectly but it's closer to a ponzi scheme than what it is advertised as.

You'd think the populace would be enraged that social security benefits might not go out if the debt limit isn't raised. What does the debt limit have to do with social security if it is even remotely sustainable? We are all still paying out SS taxes aren't we? The reality is the payments made into the system only cover about half its expenditures.

 

[OneRedNSX]

What does the debt limit have to do with social security if it is even remotely sustainable? We are all still paying out SS taxes aren't we? The reality is the payments made into the system only cover about half its expenditures.

actually it is still doing ok for itself...for the moment... Problem is that the social security trust fund invests in... Government bonds! There is your correlation. If the government defaults on payments then it takes chunks from SS.

Borrowing money from yourself to pay back to yourself plus interest just kinda seems like a dumb idea to me when you can't even take in enough money to not run a deficit anyway. The government has turned social security into another revenue stream for itself which it should have never been allowed to do. It is almost a classic ponzi scheme, only missing the fraudulent intent aspect to really be called such...

Now as to being an opt in/out program... That works in theory as long as you can mandate the opt-outers have a retirement plan of their own. Last thing you want is a generation of fools that meant to save but never did putting an even bigger burden on everybody. I look at it as a sort of insurance policy... I have my 401k but if something happens to it and it falls short, I might have a ss payment... If not, I have my 401k so I'm probably still ok. It just really needs better management and laws to remove it as a lender to the govt. Closing up some of the very large holes in the tax code would also help to divert more money towards the country's retirement as well.

 

[Russ]

You could work for Galveston, TX, one of the few municipalities that opted out of Social Security in favor of a locally-administrated retirement plan.

http://www.usatoday.com/news/opinion/2005-03-15-benefits-reform-galveston_x.htm

 

[jond]

I doubt the founders (during the depression) envisioned the baby boom and the bust.

The way I understand it, the problem is some presidents a few decades ago started stealing from it. They should be in jail right now IMO.
If the money you put in was actually there and made interest your entire career, you would have money to pull out.
As it stands, since the money isn't there, we require current employees to pay for retiring employees.

 

[SilverStone05]

FWIW-

We aren't paying into any system or account and nothing is "set aside."

It's a tax, plain and simple- the revenues thereof that can be used at the whims of the bureacrats.

 

[Vega$ NSX]

 

[BATMANs]

SS checks?

Why don't u ask the new owners of the USA?

 

[HIJACKER]

You could work for Galveston, TX, one of the few municipalities that opted out of Social Security in favor of a locally-administrated retirement plan.

http://www.usatoday.com/news/opinion/2005-03-15-benefits-reform-galveston_x.htm

Interesting - I never knew about that!