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Yachtie -> Social Security and Medicare. Are people entitled to what they get? (11/24/2013 6:50:53 AM)
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People receiving SS and Medicare believe they rightfully are owed it, entitled to it because they funded it. It's undeniable that those receiving SS and Medicare did contribute to its funding. Some people claim SS and Medicare are good because, without such, people would suffer. Can't have that. SS and Medicare are the right thing to do simply because, well, it is. To even intimate otherwise has been labeled as uncaring, mean spirited, selfish, and even as having no problem pushing granny, in her wheelchair, over the cliff.
Submitted by Gary Galles of the Ludwig von Mises Institute,
“We paid our Social Security and Medicare taxes; we earned our benefits.” It is that belief among senior citizens that President Obama was pandering to when, in his second inaugural address, he claimed that those programs “strengthen us. They do not make us a nation of takers.”
If Social Security and Medicare both involved people voluntarily financing their own benefits, an argument could be made for seniors’ “earned benefits” view. But they have not. They have redistributed tens of trillions of dollars of wealth to themselves from those younger.
Social Security and Medicare have transferred those trillions because they have been partial Ponzi schemes.
After Social Security’s creation, those in or near retirement got benefits far exceeding their costs (Ida Mae Fuller, the first Social Security recipient, got 462 times what she and her employer together paid in “contributions”). Those benefits in excess of their taxes paid inherently forced future Americans to pick up the tab for the difference. And the program’s almost unthinkable unfunded liabilities are no less a burden on later generations because earlier generations financed some of their own benefits, or because the government has consistently lied that they have paid their own way.
Since its creation, Social Security has been expanded multiple times. Each expansion meant those already retired paid no added taxes, and those near retirement paid more for only a few years. But both groups received increased benefits throughout retirement, increasing the unfunded benefits whose burdens had to be borne by later generations. Thus, each such expansion started another Ponzi cycle benefiting older Americans at others’ expense.
Social Security benefits have been dramatically increased. They doubled between 1950 and 1952. They were raised 15 percent in 1970, 10 percent in 1971, and 20 percent in 1972, in a heated competition to buy the elderly vote. Benefits were tied to a measure that effectively double-counted inflation and even now, benefits are over-indexed to inflation, raising real benefit levels over time.
Disability and dependents’ benefits were added by 1960. Medicare was added in 1966, and benefits have been expanded (e.g., Medicare Part B, only one-quarter funded by recipients, and Part D’s prescription drug benefit, only one-eighth funded by recipients).
The massive expansion of Social Security is evident from the growing tax burden since its $60 per year initial maximum (for employees and employers combined). Tax rates have risen and been applied to more earnings, with Social Security now taking a combined 12.4 percent of earnings up to $113,700 (and Medicare’s 2.9 percent combined rate applies to all earnings, plus a 0.9 percent surtax beyond $200,000 of earnings).
The supposedly “most successful government program in the history of the world,” according to Harry Reid, has turned seniors into serious takers. The fact that some of them are now starting to share the pain caused by those programs does not contradict that fact. It just shows the dark side of the most successful Ponzi scheme in the history of the world.
Some people claim that SS, even Medicare, is well funded. Others say that SS (and / or Medicare) can be easily stabilized by doing this and that. People see no problems with these government programs. It's all fixable. I'd agree, provided they are not Ponzi (if even only quasi so).
SS and Medicare are two pillars of the Great Social Safety Net. One might correctly argue that the ACA is the first step in implimentation of another; single payer.
Given where the road must eventually end, how can anyone think these are good things? Of course, if one is looking to benefit from them, well, they must be good. Guess it really doesn't matter who ends up, when that time comes, holding the bag as long as it isn't you.
But for the moment people get to enjoy that emotional feel-good biscuit of compassion. Who could possibly be against that?
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