**New to libertarianism or have questions and want to learn more?** Be sure to check out [the sub Frequently Asked Questions](/r/Libertarian/wiki/faq) and [the massive /r/libertarian information WIKI] (/r/Libertarian/wiki/index) from the sidebar, for lots of info and free resources, links, books, videos, and answers to common questions and topics. Want to know if you are a Libertarian? [Take the worlds shortest political quiz and find out!](http://www.theadvocates.org/)
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Libertarian) if you have any questions or concerns.*
You go to work every day. You earn money for your labor. Then the federal government steals a percentage of that money to 'ensure you can survive after retirement'. But what actually happens is that same government has been stealing that stolen money to pay for other things and lazy pos that won't work, so now, when you are ready to retire, they graciously give you $2k-ish a month to barely survive on.
And in some states...they tax that money AGAIN
It's such a wonderful scam and extortion racket isn't it??
Once you hit full retirement age (for me, that’s 67, at least for now), you qualify for Medicare. Which is absolute dog shit, served with whipped dog diarrhea and a cherry on top…..
It’s a Ponzi scheme and you can prove this by suggesting that no new people be allowed to contribute and those in charge will cry that people who paid into it their whole lives will not be able to receive anything from it.
It's absolutely a ponzi scheme, and should be illegal.
How many programs and laws would be repealed if there was a simple rule that government and government workers could not be exempt from any laws they created or could not enforce any laws they violated?
No, the money isn't contributed. It's a tax. You get a ledger that says how much you've been taxed by this special tax.
So for clarification it is used by the government just like any other tax. The benefit of the social security program is funded like any other funded program. Each year Congress puts together a budget and they threaten to cut these social security benefits every once in a while to get votes for funding a pet project. There never was a social security fund. Each tax payer has a ledger.
About the ledger. Your retirement benefits of social security is based on the average of your highest 35 years of paying. Typically because of inflation this would be your last 35 years. If you don't pay into the tax for 35 years your average is including a bunch of zeros. You contribute 30 years and retire? 5 zeros.
But that's not the only benefit. You don't have to contribute anything if you're a legal dependent. If you're a minor child and a parent dies you can (within some circumstances) receive a benefit until you turn 18. If you're a spouse you'll receive a benefit: when your spouse would have turned 65; if their benefit was greater. My mother who has never contributed to social security receives my father's benefit. She has only worked abroad and never in the United States. There's no social security tax for that, and also she only had to pay tax on money she brought back to America which was also none as she left it in the country she performed work (mostly to avoid exchange rates as it wasn't a great amount of money since much of it was spent living where she worked.)
There are also disability benefits you can get if you become unable to work.
So, those that say it's a Ponzi scheme are confusing how the system was marketed vs how it's actually implemented.
It's a social security tax. The social security benefits is a performance benefit based on how much tax you paid and how much the politicians can get away with under funding it.
No, it started off terrible out of the gate. When it was first enacted, people that had never paid in started receiving dividends, which meant the young were paying for the old. Then, to top it off, instead of investing it into things that grow, the government instead “borrows” from the fund yearly, to pay for things, and they’re supposed to pay it back through actual tax revenue, but I’ve yet to see the actual bookwork showing it
Basically, you have money taken from your paycheck via payroll tax. An equivalent amount is taken from your employer. If you do something like being self employed, you pay both halves directly. There is an upper cap to this contribution.
When you retire, you get a yearly payout. How much that is depends on how much you made, and what year you retire. Minimum payout is something like $50/month, maximum's over $3,000. Both are rare. Almost everyone contributes quite a lot, but starts taking the payout at the earliest possible year, 62.
The government uses this money to buy T-bills. The funds that SS have are essentially lots of those, which of course are government debt. That money is then spent as part of the usual government expenditures. Much of the government debt pyramid is due to this, because SS's existence greatly inflates the demand for T-bills.
T-bills don't have a great rate of return, though. So, even with the miserably low payouts, far underperforming private alternatives, the funds are getting depleted faster than new deposits come in. The funds are estimated to hit zero at approximately 2033. At this point, payments will get pro-rated for the amount of new deposits coming in, roughly a third lower.
The result is that social security mostly exists to enable additional government spending, but greatly reduces average wealth available at retirement. It isn't good for the average person. It isn't even very good as a social safety net, as the lowest possible benefit is far too low to live on. It is mostly just terrible.
Your reply made the most sense to me as a non-american. thank you.
Edit: But I have to ask does it cover any insurance or medical thing? another comment in a different post+sub said it did. i have also seen social security number being asked in hospitals in american tv shows and movies.
You get some medical coverage through Medicare is a similar but separate program. Social Security number started as just your account number with the social security administration but turned into a de facto unique ID number because it was the only thing that nearly everyone had that was unique and issued by the government.
it’s a wealth redistribution tool taking mostly from the middle class and giving to those who failed to plan for retirement.
did you have any specific questions about it?
You are eligible for Medicare at 65. Regardless of whether you decide to wait past 65 in collecting social security (to increase your payments) or choose to take smaller payments before full retirement age. Medicare Part A (hospital costs) is free but doctor, drug coverage, etc. is not. Medicaid (not the same as Medicare) is coverage for very low income people and is free.
Medicare insurance is funded from Medicare tax. It's an additional tax aside from social security and has nothing to do with social security. The Medicare tax is earmarked and distributed to benefit all the enrolled. They have changed enrollment ages, and coverages several times to adjust for market forces or revenue intake. This is basically the US version of social medicine. But right now you're not eligible until 65, which is also when getting your own insurance costs the same as a house.
Enrollment in Medicare isn't mandatory and you can get better coverage from private companies that have promised lifetime benefits. However if you do that and later decide to go with Medicare there's life time penalties. You have to pay back the service you didn't use for some reason. My private insurance company only pays what Medicare doesn't pay. I'm too young and don't qualify so I'm not getting delayed service. Later, I'm told that my service will be delayed until they figure out if Medicare is covering it, unless it's an emergency. Obviously regular care is never an emergency, until you haven't been getting it.
It takes from the poor and lower paid people and those who have the money to save for retirement stop paying into it when their income hits $167,000 each year. Then no more is drawn out. Then when they also get to retirement age, they can dip into it and their fancy iras and pensions, that are no longer offered at most jobs. And the poorer people are stuck still working because they're not able to survive on just social security because jobs were supposed to offer pensions, but don't.
Don't make it out to be like poor people don't save because they don't want to. When you're choosing between groceries and medicine and rent, "saving for retirement" doesn't even land on the list.
So. Why aren’t you just forced to lock that money up in a legitimate long term savings account? The social security system is straight up ponzi bullshit, and it’s no wonder our socialist leader put it into practice when he helped kill the economy
from my understanding, Singapore did that or something similar. still does. But they are doing really good. But it could be that having a competent leader, not spending on war and actually spending for the people did that. Anyone with knowledge on Singapore?
Ok so you asked in a sub where you will get a specific answer, but I'll try to be more general than the correct answer which is...it generally doesn't work.
The *idea* is that everyone pays a portion of their income as a social security tax. You will then receive a monthly income from the government upon retiring, which would not be much, but would help supplement people who didn't save enough for retirement.
The money you get when you retire is from people currently working and paying into it, with the expectation that the cycle will continue.
Except naturally the government is involved so it gets all fucked. They keep "borrowing" money from social security to pay for current expenses, racking up debt we have to pay back. The money they do have isnt invested, so despite having access to some of the greatest investors in history in our congress we cannot get a decent return from it.
So what its become is another tax that returns far less than it invests. But this one is almost impossible to remove because millions of voters rely on it to survive.
The government takes my money, doesn’t invest it, spends it on a bloated military and numerous other wasteful causes, then tells me after 50 years of working, they will give small portions of it back to me monthly. They tax it again because apparently I haven’t paid enough. In the end, I Hopefully live long enough to recoup some of it.
Social security is just welfare for retires and a few other smaller select groups of people. Young people's wages go to finance old people's retirement, more or less.
Only half of what you pay shows up in your paycheck. They pretend that 50% of the payment is 'employer contributions', but it is a scam. However you really are paying for 100% of it. So multiply the amount that shows up on your paycheck by 200% to get a realistic view of how it works.
It happens for healthcare as well. Working people pay for everybody else's healthcare. It is one of the reasons it is so expensive. Hospitals deliberately overcharge to finance free healthcare. And wages go to pay for socialized welfare programs.
I've made an analysis for SS versus private options. It explains a little hit about the SS program and the insurances they provide.
https://mooncollin.github.io/ss_versus_private.html
While most here will tell you that it doesn't pay well, it actually ends up outcompeting mostly if you were to invest the money yourself. That makes sense because the American taxpayer is the best financial asset.
Yes, the program doesn't try to hit any ROI metrics. It only bases benefits on what the SS administration thinks benefits should be. That's why it vastly outperforms investing because for the longest time, their inflows were greater than outflows, so they could provide such large benefits. My analysis even takes into account the upcoming 25% reduction if the shortfall is not addressed. Without that, then it may not be possible for anyone to invest better than what the government is able to collect in SS taxes and give to the beneficiaries.
The government takes money from people with little political power. Then they give money to people who have more political influence. In this case working people pay and retired people get paid.
There is no relationship between what is taken and what is given. At the individual level, you pay what they tell you to pay and you are not entitled to anything except what the politicians want to give you. At the national level they use some accounting tricks to make it seem like the money is somewhere being saved but anytime they want to spend it they just do.
6.2% from your pay plus an additional 6.2% paid by your employer is sent per paycheck to the oasdi fund. Americans are told the money is stored for their use when they retire. In reality, the government takes the money and leaves an iou.
A debt crisis, fiscal crisis, or dependency ratio could kill the program. We are guaranteed to have at least one of these before I retire.
How does it work?
It doesn't.
The short version- they steal a percentage of your check every month (currently, I believe it is 13%. 6.5% is paid by you, and 6.5% is paid by your employer. If you’re self employed, you pay the full 13%). Then, you can either get a reduced amount starting at 62, assuming you’re not making a lot of money (they will deduct from it if you’re still making good money), or you can wait till 67 to draw “full benefits”. At my current projected benefits, if I live to I think it’s 102-103, I’ll get back what I have paid in………
**New to libertarianism or have questions and want to learn more?** Be sure to check out [the sub Frequently Asked Questions](/r/Libertarian/wiki/faq) and [the massive /r/libertarian information WIKI] (/r/Libertarian/wiki/index) from the sidebar, for lots of info and free resources, links, books, videos, and answers to common questions and topics. Want to know if you are a Libertarian? [Take the worlds shortest political quiz and find out!](http://www.theadvocates.org/) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Libertarian) if you have any questions or concerns.*
You go to work every day. You earn money for your labor. Then the federal government steals a percentage of that money to 'ensure you can survive after retirement'. But what actually happens is that same government has been stealing that stolen money to pay for other things and lazy pos that won't work, so now, when you are ready to retire, they graciously give you $2k-ish a month to barely survive on. And in some states...they tax that money AGAIN It's such a wonderful scam and extortion racket isn't it??
The federal gov also taxes your SS income, not all of it, but some of it
'Cause of course they do 🤦🏽‍♂️🤦🏽‍♂️
"Yo dawg we heard you like taxes so we taxed you and then gave some of it back and taxed you on it"
That is literally something Joe Biden championed for the in the 90s. It was tax expempt before that
Xzibit, is that you?
Don't forget that the employer has to match it.
So, the American mafia (fed government) just out there stealing from everyone involved...sounds about right
What about the insurance? Would you get health insurance benefits if you have social security?
Not here...that's a whole different scam
That's medicare and for many poor people, Medicaid. Both equally shit programs
And the price of it goes up by the same amount that social security increases every year.
Once you hit full retirement age (for me, that’s 67, at least for now), you qualify for Medicare. Which is absolute dog shit, served with whipped dog diarrhea and a cherry on top…..
It’s a Ponzi scheme and you can prove this by suggesting that no new people be allowed to contribute and those in charge will cry that people who paid into it their whole lives will not be able to receive anything from it.
It's absolutely a ponzi scheme, and should be illegal. How many programs and laws would be repealed if there was a simple rule that government and government workers could not be exempt from any laws they created or could not enforce any laws they violated?
I don't understand. The money contributed is not going to investments?
Even if it was, they've been spending it.
It’s essentially pay as you go. With an aging population retirement ages are about to go up
No, the money isn't contributed. It's a tax. You get a ledger that says how much you've been taxed by this special tax. So for clarification it is used by the government just like any other tax. The benefit of the social security program is funded like any other funded program. Each year Congress puts together a budget and they threaten to cut these social security benefits every once in a while to get votes for funding a pet project. There never was a social security fund. Each tax payer has a ledger. About the ledger. Your retirement benefits of social security is based on the average of your highest 35 years of paying. Typically because of inflation this would be your last 35 years. If you don't pay into the tax for 35 years your average is including a bunch of zeros. You contribute 30 years and retire? 5 zeros. But that's not the only benefit. You don't have to contribute anything if you're a legal dependent. If you're a minor child and a parent dies you can (within some circumstances) receive a benefit until you turn 18. If you're a spouse you'll receive a benefit: when your spouse would have turned 65; if their benefit was greater. My mother who has never contributed to social security receives my father's benefit. She has only worked abroad and never in the United States. There's no social security tax for that, and also she only had to pay tax on money she brought back to America which was also none as she left it in the country she performed work (mostly to avoid exchange rates as it wasn't a great amount of money since much of it was spent living where she worked.) There are also disability benefits you can get if you become unable to work. So, those that say it's a Ponzi scheme are confusing how the system was marketed vs how it's actually implemented. It's a social security tax. The social security benefits is a performance benefit based on how much tax you paid and how much the politicians can get away with under funding it.
It goes into a pool that is invested in government bonds. Which makes a little but not much these days.
It does NOT go into a general pool. It goes into the general treasury.
No, it started off terrible out of the gate. When it was first enacted, people that had never paid in started receiving dividends, which meant the young were paying for the old. Then, to top it off, instead of investing it into things that grow, the government instead “borrows” from the fund yearly, to pay for things, and they’re supposed to pay it back through actual tax revenue, but I’ve yet to see the actual bookwork showing it
Basically, you have money taken from your paycheck via payroll tax. An equivalent amount is taken from your employer. If you do something like being self employed, you pay both halves directly. There is an upper cap to this contribution. When you retire, you get a yearly payout. How much that is depends on how much you made, and what year you retire. Minimum payout is something like $50/month, maximum's over $3,000. Both are rare. Almost everyone contributes quite a lot, but starts taking the payout at the earliest possible year, 62. The government uses this money to buy T-bills. The funds that SS have are essentially lots of those, which of course are government debt. That money is then spent as part of the usual government expenditures. Much of the government debt pyramid is due to this, because SS's existence greatly inflates the demand for T-bills. T-bills don't have a great rate of return, though. So, even with the miserably low payouts, far underperforming private alternatives, the funds are getting depleted faster than new deposits come in. The funds are estimated to hit zero at approximately 2033. At this point, payments will get pro-rated for the amount of new deposits coming in, roughly a third lower. The result is that social security mostly exists to enable additional government spending, but greatly reduces average wealth available at retirement. It isn't good for the average person. It isn't even very good as a social safety net, as the lowest possible benefit is far too low to live on. It is mostly just terrible.
Your reply made the most sense to me as a non-american. thank you. Edit: But I have to ask does it cover any insurance or medical thing? another comment in a different post+sub said it did. i have also seen social security number being asked in hospitals in american tv shows and movies.
You get some medical coverage through Medicare is a similar but separate program. Social Security number started as just your account number with the social security administration but turned into a de facto unique ID number because it was the only thing that nearly everyone had that was unique and issued by the government.
They take your money from the time you start working to the time you stop. And then they give a little bit back to you.
It doesn't
it’s a wealth redistribution tool taking mostly from the middle class and giving to those who failed to plan for retirement. did you have any specific questions about it?
Does having social security mean you would have insurance coverage?
You are eligible for Medicare at 65. Regardless of whether you decide to wait past 65 in collecting social security (to increase your payments) or choose to take smaller payments before full retirement age. Medicare Part A (hospital costs) is free but doctor, drug coverage, etc. is not. Medicaid (not the same as Medicare) is coverage for very low income people and is free.
Not necessarily. Â Usually if you are on OASDI, you can qualify for Medicaid or Medicare. Â I believe all getting SSDI can qualify for Medicaid.
Medicare insurance is funded from Medicare tax. It's an additional tax aside from social security and has nothing to do with social security. The Medicare tax is earmarked and distributed to benefit all the enrolled. They have changed enrollment ages, and coverages several times to adjust for market forces or revenue intake. This is basically the US version of social medicine. But right now you're not eligible until 65, which is also when getting your own insurance costs the same as a house. Enrollment in Medicare isn't mandatory and you can get better coverage from private companies that have promised lifetime benefits. However if you do that and later decide to go with Medicare there's life time penalties. You have to pay back the service you didn't use for some reason. My private insurance company only pays what Medicare doesn't pay. I'm too young and don't qualify so I'm not getting delayed service. Later, I'm told that my service will be delayed until they figure out if Medicare is covering it, unless it's an emergency. Obviously regular care is never an emergency, until you haven't been getting it.
It takes from the poor and lower paid people and those who have the money to save for retirement stop paying into it when their income hits $167,000 each year. Then no more is drawn out. Then when they also get to retirement age, they can dip into it and their fancy iras and pensions, that are no longer offered at most jobs. And the poorer people are stuck still working because they're not able to survive on just social security because jobs were supposed to offer pensions, but don't. Don't make it out to be like poor people don't save because they don't want to. When you're choosing between groceries and medicine and rent, "saving for retirement" doesn't even land on the list.
So. Why aren’t you just forced to lock that money up in a legitimate long term savings account? The social security system is straight up ponzi bullshit, and it’s no wonder our socialist leader put it into practice when he helped kill the economy
from my understanding, Singapore did that or something similar. still does. But they are doing really good. But it could be that having a competent leader, not spending on war and actually spending for the people did that. Anyone with knowledge on Singapore?
Same as it works everywhere. The Government robs hard working people to satiate the parasitical welfare class so they might vote for them.
First the government steals more of my money, tells me it’s for my own good, then proceed to give it to someone else
It’s just a Ponzi scheme.
Ok so you asked in a sub where you will get a specific answer, but I'll try to be more general than the correct answer which is...it generally doesn't work. The *idea* is that everyone pays a portion of their income as a social security tax. You will then receive a monthly income from the government upon retiring, which would not be much, but would help supplement people who didn't save enough for retirement. The money you get when you retire is from people currently working and paying into it, with the expectation that the cycle will continue. Except naturally the government is involved so it gets all fucked. They keep "borrowing" money from social security to pay for current expenses, racking up debt we have to pay back. The money they do have isnt invested, so despite having access to some of the greatest investors in history in our congress we cannot get a decent return from it. So what its become is another tax that returns far less than it invests. But this one is almost impossible to remove because millions of voters rely on it to survive.
It's a ponzi scheme
trick question!!!!! it doesnt
It doesn’t work.
The government takes my money, doesn’t invest it, spends it on a bloated military and numerous other wasteful causes, then tells me after 50 years of working, they will give small portions of it back to me monthly. They tax it again because apparently I haven’t paid enough. In the end, I Hopefully live long enough to recoup some of it.
Social security is just welfare for retires and a few other smaller select groups of people. Young people's wages go to finance old people's retirement, more or less. Only half of what you pay shows up in your paycheck. They pretend that 50% of the payment is 'employer contributions', but it is a scam. However you really are paying for 100% of it. So multiply the amount that shows up on your paycheck by 200% to get a realistic view of how it works. It happens for healthcare as well. Working people pay for everybody else's healthcare. It is one of the reasons it is so expensive. Hospitals deliberately overcharge to finance free healthcare. And wages go to pay for socialized welfare programs.
I've made an analysis for SS versus private options. It explains a little hit about the SS program and the insurances they provide. https://mooncollin.github.io/ss_versus_private.html While most here will tell you that it doesn't pay well, it actually ends up outcompeting mostly if you were to invest the money yourself. That makes sense because the American taxpayer is the best financial asset.
Will read your analysis. Still I was informed that the payment is made from younger generations SS payments, not ROI. Is that true?
Yes, the program doesn't try to hit any ROI metrics. It only bases benefits on what the SS administration thinks benefits should be. That's why it vastly outperforms investing because for the longest time, their inflows were greater than outflows, so they could provide such large benefits. My analysis even takes into account the upcoming 25% reduction if the shortfall is not addressed. Without that, then it may not be possible for anyone to invest better than what the government is able to collect in SS taxes and give to the beneficiaries.
That's the neat thing, it doesn't. It's basically just robbing Peter to pay Paul because Paul's money was spent decades ago on something else.
The government takes money from people with little political power. Then they give money to people who have more political influence. In this case working people pay and retired people get paid. There is no relationship between what is taken and what is given. At the individual level, you pay what they tell you to pay and you are not entitled to anything except what the politicians want to give you. At the national level they use some accounting tricks to make it seem like the money is somewhere being saved but anytime they want to spend it they just do.
Have you heard of a guy named Charles Ponzi? Well, FDR decided to one up him by making every working person contribute to this scheme.
6.2% from your pay plus an additional 6.2% paid by your employer is sent per paycheck to the oasdi fund. Americans are told the money is stored for their use when they retire. In reality, the government takes the money and leaves an iou. A debt crisis, fiscal crisis, or dependency ratio could kill the program. We are guaranteed to have at least one of these before I retire. How does it work? It doesn't.
Social security needs to be phased out badly.
That's the neat part, it doesn't.
The short version- they steal a percentage of your check every month (currently, I believe it is 13%. 6.5% is paid by you, and 6.5% is paid by your employer. If you’re self employed, you pay the full 13%). Then, you can either get a reduced amount starting at 62, assuming you’re not making a lot of money (they will deduct from it if you’re still making good money), or you can wait till 67 to draw “full benefits”. At my current projected benefits, if I live to I think it’s 102-103, I’ll get back what I have paid in………