Got this in my email - Social Security info

[keith]

This email is getting around:


Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program. He promised:

1.) That participation in the Program would be completely voluntary,

2.) That the participants would only have to pay 1% of the first $1,400 of their annual incomes into the Program,

3.) That the money the participants elected to put into the Program would be deductible from their income for tax purposes each year,

4.) That the money the participants put into the independent "Trust Fund" rather than into the General operating fund, and therefore, would only be used to fund the Social Security Retirement Program, and no other Government program, and,

5.) That the annuity payments to the retirees would never be taxed as income.

Since many of us have paid into FICA for years and are now receiving a Social Security check every month -- and then finding that we are getting taxed on 85% of the money we paid to the Federal government to "put away," you may be interested in the following:

Q: Which Political Party took Social Security from the independent "Trust" fund and put it into the General fund so that Congress could spend it?

A: It was Lyndon Johnson and the Democratically-controlled House and Senate.

Q: Which Political Party eliminated the income tax deduction for Social Security (FICA) withholding?

A: The Democratic Party.

Q: Which Political Party started taxing Social Security annuities?

A: The Democratic Party, with Al Gore casting the "tie-breaking" deciding vote as President of the Senate, while he was Vice President of the U.S.

Q: Which Political Party decided to start giving annuity payments to immigrants?

A: That's right! Jimmy Carter and the Democratic Party. Immigrants moved into this country, and at age 65, began to receive SSI Social Security payments! The Democratic Party gave these payments to them, even though they never paid a dime into it!

Then, after doing all this lying and thieving and violation of the original contract (FICA), the Democrats turn around and tell you that the Republicans want to take your Social Security away!

Keith.

 

[Bob Woods]

Mostly true, but then the people wanted the SS to do more and provide more. Like any government deal it grows. If the money was put into a special trust fund it would have been invested, just like they do now, in government bonds, T notes, and what ever the FED has to offer. The problem is, we the people pay taxes to pay the interest earnings.

 

[k1xv]

When social security first started, the market basket of prices was at 1936 levels. Today, they are at 2004 levels.

When social security first started, life span was much shorter and the average recipient only collected for a small number of years. Today, with longer lifespans, the typical recipient collects for 15 years or more.

Once the Social Security staff organization was in place, it made more sense to use it to administer other programs, than to create numerous duplicative organizations and staffs to administer other benefit programs.

When Bush got into office, Alan Greenspan and Paul O'Neill had a plan to apply part of the budget surpluses they inherited from the Clinton regime to stabilizing Social Security. Tax cuts would only occur if the budget could afford them. However, various idealogues in the Bush Administration quashed that, and now we have $500 billion plus deficits, and little Social Security reform.

While Franklin Roosevelt was elected to four terms, he died in office in 1945. Since then, subsequent Administrations, including the present Administration, have had 59 years to goof things up.

I doubt anyone could keep any so called "promise" 59 years after they died.

 

[MarkC]

You fail to realize that when FDR took office, over 1200 banks had failed in the uS and unemployment was rampant..I think something over 20%.

 

[darryld13]

Molecule posted this back in May here. The first 3 assertions are definitely bogus and 4 and 5 are dubious revisionist history at best.

Further investigation casts a doubtful light on the veracity of the remaining assertions:

- Social Security is still a trust fund - the US Government borrows money from it and provides Treasury bonds as collateral.

- it was President Reagan who signed the bill authorizing taxing Social Security. I'm not sure how much of an impact it had on the final outcome, but President Reagan had appointed a blue-ribbon panel known as the Greenspan Commission to study Social Security financing issues and make legislative recommendations. Vice President Gore did cast a tie breaking vote on an Omnibus Budget Reconciliation Act of 1993 that among numerous other items approved an INCREASE on tax for Social Security. But that is far from starting taxing.

-It was under President Nixon in 1972 when public law 92-603 provided a provision (Other Eligibility Provisions Citizenship and Residence) under which immigrants began receiving Social Security benefits. President Clinton barred such distributions in 1996 under The Personal Responsibility and Work Opportunity Reconciliation Act - it was reversed the following year with the signing of the Balanced Budget Act of 1997, however.

So as far as I can tell, not one item is completely accurate - pretty typical for the Internet age, unfortunately.

 

[keith]

These guys have a nice short article on the so called Trust Fund scam:

Pointless Debate over Social Security Trust Fund


"Social Security taxes should be invested in real financial assets, not government promises to raise future taxes".

P.J. O'Rourke: "Having a government Trust Fund is exactly the same thing as not having a government Trust Fund."

You can parse words all day long. There still won't be a Trust Fund as you would ordinarily define a Fund (i.e. real assets).

Keith.

 

[thiggy]

When Social Security was initiated, the intent was to supplement income lost upon the retirement or death of the primary wage-earner. Later that was expanded to include income lost due to the disability of the wage-earner to work. Why is it now that SSA must pay people who were never dependent upon the worker, such as divorced spouses, step children and illigetimate children who were never supported during the lifetime of the worker? If there was not a loss of income due to retirement, death or disability, why should the federal govt. pay SS benefits to these individuals?

 

[darryld13]

quote:

---

Originally posted by keith:
These guys have a nice short article on the so called Trust Fund scam:

Pointless Debate over Social Security Trust Fund

~SNIP~

You can parse words all day long. There still won't be a Trust Fund as you would ordinarily define a Fund (i.e. real assets).

Keith.

---

Then how do you define a fund? Even the above link concedes "(Social Security) is a bad system, but it is how the trust fund was designed to work."

Banks take in customer assets and loan them out in the form of bonds - just like the Social Security funds. Just like Social Security, if there is a sudden claim on assets by all investors, there will be trouble in River City. Yet we still invest significant saving in this imperfect system with practically worthless guarantees because a better one does not yet exist - just like Social Security. I can see parallels to the FDIC guarantees up to $100,000 bank funds with regards to the S&L failures in the 1980. That fiasco cost taxpayers much $$, yet the government still carries that function forward.

This is how our current economic environment is. Much is about compromise in today's society. I am not at all happy about the prospect of no money being available for me when my time comes, but the system has been beneficial for generations that proceeded and sacrificed for future generations with no guarantee of return on their investment. The previous generations set Social Security up to spare future generations the pitfalls they experienced, a noble gesture. Does it need fixing? Yes. Is it right to yank $$ retirees banked on and invested in? No. How to address both issues simultaneously is the crux of the problem. If the government gets into the business of not honoring its promises and obligations, then all faith will be lost, both domestically and internationally.

[ August 11, 2004, 10:55 AM: Message edited by: darryld13 ]

 

[keith]

When JFKerry barks about not changing Social Security, just says "Thank you oh great one" and bow.

This is an old article, and the confiscation rates have of course gone up significantly since, but the points are more valid now than then:

Some Americans Already Have Privatized Social Security

Read the comparison of Social Security benefits to the private plan, and weep.

Social Security - an illegal Ponzi scheme if operated privately.


Fund - a reserve of money set aside for some purpose.

Social Security Trust Fund - IOU's placed against future tax collections.


Sure, the early recipients from Social Security did well. That is the very nature of illegal Ponzi schemes.

Keith.

 

[darryld13]

According to the 1999 GAO analysis of Alternate Plans in Texas, after 36 years of working, the low and medium wage earners benefit much better from Social Security while high wage earners make out much better, although if spousal benefits are included, Social Security hands out much more. The Alternate Plan kicks Social Security's butt if the individual participant works for 45 years, but if a spouse is involved, Social Security comes out ahead again. I suspect the numbers are still in Social Security's favor since stock and bond indexes over the last 5 years have been decidedly lackluster.

Perhaps the GAO report is not entirely accurate or perhaps some of the assumptions flawed. But good luck selling that plan to the Grey Panthers. They don't have 45 years to ramp up to superior benefits. As President Bush has discovered, that issue is a political land mine. Had he managed to push through his plan to tie some Social Security funds to the stock market, he would be in some serious political hurt right now as he would have been held responsible for the seniors losing money.