When it's supported by the tax paying public.
...
Free money for the rich.

You mean free money for the productive. I prefer that over free money to inhibit productivity, which is the main activity of government today, transferring wealth from the makers to the takers.

I own stock (directly) in only one company on that list, Tesla. The table shows a "subsidy" of over $3B. I'd love to hear the specifics of how that was calculated. Is it the loans that were paid back with interest? That would a bit disingenuous don't you think? Borrowing money and paying it back hardly qualifies as "free money".

 

Oh, and everyone's got a pocket supercomputer and universal communicator. Who'd a thunk?

... still waiting for my personal tricoder, though ...

 

... still waiting for my personal tricoder, though ...

But, at least you can die from too much food.

 

https://www.gadgetreview.com/ai-slo...ar-monstrosity-and-rei-let-it-ride-for-a-week


An REI Instagram ad circulating last week showed a Van Rysel EDR AF road bike that looked like it was assembled by someone who’d only ever heard a bicycle described over a bad phone connection. Handlebars sprouting from the seat. Multiple chains on a single drivetrain. Blurry, melted frame lettering. A human figure whose body and face appeared stitched together from different people. The ad ran for roughly a week before REI pulled it on June 22, according to Business Insider.

 

https://www.gadgetreview.com/ai-slo...ar-monstrosity-and-rei-let-it-ride-for-a-week

View attachment 368748
An REI Instagram ad circulating last week showed a Van Rysel EDR AF road bike that looked like it was assembled by someone who’d only ever heard a bicycle described over a bad phone connection. Handlebars sprouting from the seat. Multiple chains on a single drivetrain. Blurry, melted frame lettering. A human figure whose body and face appeared stitched together from different people. The ad ran for roughly a week before REI pulled it on June 22, according to Business Insider.

Stupid humans.

 

Unfortunately, she doesn't elaborate on how much, and how, AI is helping this effort:

 

You mean free money for the productive. I prefer that over free money to inhibit productivity, which is the main activity of government today, transferring wealth from the makers to the takers.

I own stock (directly) in only one company on that list, Tesla. The table shows a "subsidy" of over $3B. I'd love to hear the specifics of how that was calculated. Is it the loans that were paid back with interest? That would a bit disingenuous don't you think? Borrowing money and paying it back hardly qualifies as "free money".

It's not much effort these days to open mindedly research your question, there are huge resources, studies, etc all about this subject. Long gone are the days where one would have to spend weeks trawling libraries to do this.

Here's a book for example, it explains among other things, how the government has been illegally borrowing from the social security fund for decades both democrat and republicans, surely educated engineers with mathematical skills can grasp these things?

 

They didn't borrow the money, they stole it to buy votes.

 

It's not much effort these days to open mindedly research your question, there are huge resources, studies, etc all about this subject. Long gone are the days where one would have to spend weeks trawling libraries to do this.

Here's a book for example, it explains among other things, how the government has been illegally borrowing from the social security fund for decades both democrat and republicans, surely educated engineers with mathematical skills can grasp these things?

View attachment 368777

If they have been doing it "illegally", what is the statute that they are violating?

As you say, it's not much effort these days to open mindedly research things like this.

So let's look at the original Social Security Act of 1935, which first established Social Security, namely Title II - Federal Old-Age Benefits, Section 201. (b).

"It shall be the duty of the Secretary of the Treasury to invest such portion of the amounts credited to the Account as is not, in his judgment, required to meet current withdrawals. Such investment may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States."

This same section establishes the "special obligations exclusive to the Account" and required the administrator to purchase them.

This is codified in 42 U.S.C. § 401(d)

So, which law is being violated?

 

If they have been doing it "illegally", what is the statute that they are violating?

As you say, it's not much effort these days to open mindedly research things like this.

So let's look at the original Social Security Act of 1935, which first established Social Security, namely Title II - Federal Old-Age Benefits, Section 201. (b).

"It shall be the duty of the Secretary of the Treasury to invest such portion of the amounts credited to the Account as is not, in his judgment, required to meet current withdrawals. Such investment may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States."

This same section establishes the "special obligations exclusive to the Account" and required the administrator to purchase them.

This is codified in 42 U.S.C. § 401(d)

So, which law is being violated?

I will retract "illegal", I suspect that's poor recollection of what I read years ago, but here is a snippet from Dowd's book (1997, cited above), starting at " Social Security and..."



You'll see terms like "robbery" and "embezzlement" and "deception" used.

 

I will retract "illegal", I suspect that's poor recollection of what I read years ago, but here is a snippet from Dowd's book (1997, cited above), starting at " Social Security and..."

View attachment 368783

You'll see terms like "robbery" and "embezzlement" and "deception" used.

Nothing new there, not even in 1997.

I have been calling Social Security a Ponzi scheme since they made big changes in the 1983 time frame (and it was a Ponzi scheme long before that, arguably from the beginning, that's just when it came on my radar since that was also the time that I was entering the work force as a late-teen).

I haven't looked at the official SSA site in years, but at one point they had a FAQ entry that specifically addressed the question of whether SS was a Ponzi scheme. Not surprisingly, they said that it wasn't. But then they described how it worked and, applied to any other "investment" program, that program would have been labeled a Ponzi scheme. So it really came down to them claiming that SS isn't a Ponzi scheme because they say so.

 

Yes, making good on past obligations using current funds is pretty much the definition of a Ponzi scheme. I'm amazed how many retirement-aged people believe the money they paid in over decades is sitting in an account somewhere.

The scheme can go on a long time until the obligations at the end of the scheme overwhelm the incoming funds. As Americans age, the number of workers to pay for each retiree in the program has fallen from 5.1 in 1960 to 2.8 and is still falling. It can't last.

 

Yes, making good on past obligations using current funds is pretty much the definition of a Ponzi scheme. I'm amazed how many retirement-aged people believe the money they paid in over decades is sitting in an account somewhere.

The scheme can go on a long time until the obligations at the end of the scheme overwhelm the incoming funds. As Americans age, the number of workers to pay for each retiree in the program has fallen from 5.1 in 1960 to 2.8 and is still falling. It can't last.

It could have been made sustainable indefinitely had that been an actual goal, but it really never was.

Unlike a Ponzi scheme that you and I might come up with, Social Security doesn't have to convince new groups of investors to participate or convince existing investors that they should contribute even more -- they simply pass a new law requiring groups of people that were previously exempt from participation (e.g., the self-employed, farm workers, domestic workers, state and local government workers, military, federal government workers, employees of most non-profits) to start kicking in. This results in a huge infusion of funds that they can siphon off for many years because very few of the workers in the newly inducted participants can become eligible to receive benefits in less than ten years. They also have progressively raised the social security tax rate. It stated off at 2% (combined employer/employee) and was scheduled to grow to 6% and then stay there. Today it is 12.4% and there are increasing calls to raise it to 15.8% (the rate that the SSA says is needed "permanently" (i.e., until the Ponzi scheme runs into it's next crisis). They can also pull in more money by increasing the max wage that is subject to SS taxes. It was initially $3000 (just under $70k today) and is currently $176,000. so an increase of about 2.5x. The amount of additional benefit is significantly less than the amount of additional tax paid. They can also reduce benefits by raising the full retirement age, which they have done and are talking about doing again. Furthermore, in determining your benefit, they use only a fraction of your SS wages, namely the highest 35 years, versus the total that you have paid into the system. So for someone that worked from 17 to 67, 30% of their working lifetime, and the associated taxes paid in, has zero effect on their benefit. Furthermore, if you don't get ten years of credits, you get nothing. If you die before you retire, you get nothing (there are spousal benefits that can come into play, however). So there are LOTS of people that pay a LOT of money into SS and neither they, nor their estate, ever get a dime in benefits.

A particularly pernicious provision impacts people that worked a significant part of their career in jobs that were exempt from SS taxes. Not only is the average salary upon which their benefit is based reduced because they are considered to have made zero in any year in which they didn't pay SS taxes, but if they receive a pension based on their non-SS income, their already significantly lowered SS benefits are reduced even more to prevent them from getting a "windfall". Huh? This absurdity has been eliminated for many people, but not all.

 

Not to mention that they took that money and invested it for me and only earned far less than what I would have received if I had invested it myself. Which I also did and yes I earned far more and its dividends pay far more than what the US SSI gives me monthly. Plus my kids get to keep the capital when I die.

 

Not to mention that they took that money and invested it for me and only earned far less than what I would have received if I had invested it myself. Which I also did and yes I earned far more and its dividends pay far more than what the US SSI gives me monthly. Plus my kids get to keep the capital when I die.

To be fair (and it's pretty hard for me on this one), Social Security is NOT an investment and it not presented as an investment -- even though a large fraction of people believe that it is. It is really more like insurance -- in fact, the official name is OASDI, Old Age, Survivors, and Disability Insurance, while FICA is the Federal Insurance Contributions Act. When we pay for most other forms of insurance, the hope is that we never see a return on that money. Even with life insurance, we want to get as low a return on that "investment" as possible since the key to getting a high return is to die almost immediately.

But the idea behind insurance is that you pool lots of small premiums together in order to cover high-cost events that, while everyone paying is susceptible to, only a few actually incur. The value to the people that pay and never get a benefit is the peace of mind from knowing that they are covered should they be one of the few that need it. The notion that this is somehow what Social Security is is seemingly propped up by constantly being told that it is a "safety net" social program and that is was never intended to be the primary source of income in retirement. But if it's a "safety net", that implies that it is there to catch people that otherwise would fall through the cracks and that flies in the very face of the notion that everyone that pays into it is eligible to get money out of it, not just those that somehow fall through the cracks.

Even if we buy the fantasy that it is insurance, it is damn expensive insurance! The median annual social security wages for full-time, year-round workers in 2023 was right around $62,000, which means that they "contributed" about $7700 to Social Security. The median SS benefit is about $23k/year. So one question we could ask would be what the real rate of return would need to be over a 35 year working career (since that's all that gets considered) of someone making the median wages in order to withdraw $23k/year in retirement and end up with nothing at the end of their expected life, which is about 84 for the purposes of Social Security's actuarial tables for retirement benefits. If they retire at full retirement age (currently 67) that means that they started contributing at 32, retired at 67, and died at 84, having drawn retirement benefits of 17 years. For simplicity, we will assume that the funds were invested at a fixed yield over the entire period. Running that out, the effective real rate of return (i.e., the return above inflation) is just under 1.5%. In contrast, the real rate of return of the stock market (S&P 500 and it's predecessor) since Social Security started has been 6.75%, including all the ups/downs/recessions/bubbles/crashes.

Now, this model is rather simplified with one of the biggest assumptions being that the person earned the median wage their entire working life from 32 on. In reality, most people would expect to see their earnings, relative to the median, grow over their career. But this simplification largely washes out because they are probably close to the median by the time they are in their early 30s and considerably above it in the latter part of their career. Another factor is that the impact of spousal benefits, but during the retiree's lifetime and after they pass away. One the other side of the ledger, this model only takes into account what the person receiving the benefit receives as a result of their own contributions. It does not take into account at all the significant fraction of people that pay into the system and never get any benefit, either because they never become eligible by working the required forty quarters, or because they die before drawing benefits.

 

Not to mention that they took that money and invested it for me and only earned far less than what I would have received if I had invested it myself. Which I also did and yes I earned far more and its dividends pay far more than what the US SSI gives me monthly. Plus my kids get to keep the capital when I die.

And yet listen to the wailing, moaning and rending of garments if you even talk about logical solutions such as private accounts.

It would be pretty easy to establish age-base mileposts which, if a person meets, frees them from participating in the hoax. If I agree to forgo any future benefits, and prove by passing the hurdles, that I'll not likely be living under a bridge when I'm old, then why should I pay for people who can't be bothered to save?

It's the ant and grasshopper fable. The unfortunate few that cannot earn for their futures are not like the grasshopper, who chooses not to. We can certainly give those people a safety net without ripping off generations of young people trying hard to pull themselves up.

 

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