Friday, February 18, 2005


The Social Security Problem in a Nutshell

Actually, it's simple. Social security benefits are increased based on the level of increase in wages, rather than the increase in costs (inflation). Payouts to non-working people who are drawing benefits rise at the same rate as wages paid to working people, which rise faster than the cost of living. Thus, "fixed-income" folk who draw social security benefits can not only maintain their standard of living, they can actually improve it, courtesy of the taxpayers still working.

This is the result of fifty years of congressional tinkering, and it bears no relationship to social security as it was created.

Oh, and by the way, the "trust fund" doesn't exist. Hasn't existed for years. The politicians have long since "borrowed" any money that ever was in a trust fund. Nothing in the "trust fund" but government IOU's. Ask Dennis Kucinich, or one of the other "head-in-the-sand, there's no problem" types to show you a bank account with money in it. There isn't one!

It's not rocket science, it not even complicated, like the politicians on both sides make it sound. People live longer and benefits rise faster than the cost of living. So people collect bigger benefits for longer periods of time.

When the baby-boom generation retires, the number of people collecting bigger benefits for longer periods of time skyrockets, and the system collapses.

Or you keep raising social security taxes and raising the retirement age to keep the pyramid scheme going.

Or you start doing something NOW to address the problems.

Compare Chile's system with France and Germany.

It's just not that complicated, folks!

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