Friday, May 27, 2011

Social Security: Irony for the Ages

Social refers to the interaction of organisms with other organisms and to their collective co-existence, irrespective of whether they are aware of it or not, and irrespective of whether the interaction is voluntary or involuntary.
Security is the degree of protection against danger, damage, loss, and crime.

So, it would seem to follow that "social security" would provide "a degree of protection to the interactions between a group of co-existing organisms against danger, damage, loss, and crime."

Put another way, Social Security should provide all of us protection to co-exist with each other without fear that we will be attacked, without fear that our possessions will be taken from us against our will, and to rest easy knowing that we are protected from injury and criminal activity by our affiliation with each other in a collective (government).

Now, the question is, does it?  Not in the slightest!  Setting aside the actual specifics of the program, ask yourself whether the name "social security" causes those around you to relax and live a fearless life or, rather, to become upset and actually fear what the future has in store for them and theirs.

So if the program doesn't perform the function that its name implies it should, what does it actually do, what should it be correctly labelled, and what can be done to fix it?  How was this program ever supposed to work?  Well, in a nutshell, it wasn't.....

Don't get me wrong.  There were people that honestly believed it was some miraculous program and bought into it but, anyone who's read my blog knows, simply believing something doesn't make it true.  Contrary to the words that we use when teaching our children how to cross the street, the key is NOT in the "look[ing] both ways", it's in the "not getting hit by a car"!  Simply looking both ways and not seeing a greyhound bus coming doesn't mean it's safe to cross.  Opinion and intentions do not affect reality or truth.

So, how was "Social Security" supposed to work?  How was it that you could pay in some amount of money for your entire career and then have an income for the rest of your life?  If you'd have put that money into a bank account instead, you would have expected to have some modest rate of return and actually would have been owed more than you paid in.  Therefore, for this program to be better, should it not provide more than you paid in?  The economic advantage of the program is defeated if you don't get back more than you paid in because the opportunity cost of not investing that money yourself would be enormous.  So, the only time it would be beneficial would be if it was paying equal or greater interest than that which could safely be attained elsewhere on YOUR wages.

What is typically considered the safest investment option?  People have different opinions and I'm not here to have that discussion, but let's consider a couple of "safer" options.  A normal savings account and U.S. Treasury Bonds.  Let's be honest, have you ever heard of a savings account dividend of less than zero?  What about bond security?  In my opinion, when a bond is not a safe investment, other investments (besides maybe water, rations, and ammo) are not safe either.  Now, could you see a larger return than savings and bonds?  Absolutely, but the point of this exercise is to demonstrate a minimum expected return-on-investment for taking your money from you to "provide for your future" (as if you couldn't do that with the money yourself).  If the government couldn't provide at least a return equal to buying a bond, what's the point of "social security"?

So how would the government provide an increase in the value of the money taken from your paychecks?  Remember, the government only has what it takes from the productive citizens of the country.  There is no source of income that does not involve taking from others.  So, since they can't magically increase the value of what they've taken from you over your career, the only way to do it would be by investing it themselves.  Now, this is an important point.  In order to invest your money for you, they have to have somewhere to invest it.  In order to pay you back with interest, the money has to be tracked and accounted for.  In order for that to happen, it must be kept separate throughout the process.  The largest problem is that even if they would have done all of these things (and they didn't), the entering argument is still that the government can make better investment decisions with your money than you can and has the right to to take your money from you to do it.

So, since this money was not invested on your behalf but was still taken from you, the largest amount of your money that they could possibly have is exactly what you paid into the system.  That's it. That's the most they can have.  Unfortunately, they don't even have that because they didn't save it all this time in some account or "lockbox".  It was tossed into the rest of the taxation stream and spent on whatever they thought was important at the time.  There is none of your money left.  So how are people getting paychecks from the system today if their money was spent?  It sure isn't their own money that's coming back to them.  It's coming from everyone that's still working and paying into the system.

Wait a minute, so not only did they not invest your money (or even save it) to ensure a minimum return that you could have received if sticking it in your local bank account, not only are they not able to even pay you back the amount they took from you in the first place, now they are taking money from other people and giving it to you.  They are promising the workers of today the same thing they promised you and paying you with their "investment in the future" - it's called a Ponzi Scheme - and it's illegal.

So, with the number of people receiving money going up every year, the cost to the American worker also rises.  Since there is no interest involved, the net pay-in must equal the net pay-out to break even.  This means that there will NEVER be a time when your money is worth more than it was the day it was taken from you.  In fact, since they continue to drive inflation up, your dollars are actually worth less when you retire than they were when they were stolen from you.  You are LOSING MONEY with social security - there is no other way for it to work.  You cannot possibly make money when the money you pay today is turned around and handed to someone that paid before with no increase in value (and actually a decrease in value over time).  THE BUS IS COMING DOWN THE ROAD AND WE'RE ALL STEPPING OFF THE CURB LIKE GOOD LITTLE SOCIALISTS!

Stop the insanity and stop defending the immoral and unconstitutional activities of the federal government just because you wish magic really existed.  It doesn't.

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