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They were paid to other retirees at the time. Some excess dollars were loaned to the government for general spending, which put Treasury bonds into the "social
by matthewdgreen 4y ago
They were paid to other retirees at the time. Some excess dollars were loaned to the government for general spending, which put Treasury bonds into the "social security trust fund." You in turn received credit that entitles you to receive similar payments when you retire, paid for by then-working taxpayers and by repayment of those bonds (which also comes from tax revenue.) As other posters mention, the democratically-elected government could change the law so you aren't paid those benefits: if that bothers you, you should avoid voting for politicians that want to change the arrangement.
- tomcam 4y agoJust so you know, I would be happy to end the arrangement, even though it would mean losing my Social Security benefits, which I should come into soon. I think it’s a terrible system. I am just having trouble understanding your terminology.
- csomar 4y agoHis terminology makes sense and it hits directly to the core of the problem: It's a ponzi scheme. These people were not saving into "retirements". They were giving their money, freely, for other people in the expectation that the next generation will do the same.
- tomcam 4y agoAgree completely that it’s a Ponzi scheme
- matthewdgreen 4y agoThe same thing is true of your investment account. When you buy bonds you're giving money to a company or the US Treasury who then spend it. That money is gone. You're assuming the borrower will choose pay you back from some future revenue stream. When you buy into a stock IPO you're betting that the company will pay you dividends from a future revenue stream (or do related things that make the stock perceived as valuable.) In the case of Social Security that future revenue stream is taxes drawn from the US taxpayer. None of this is a Ponzi scheme.
- phil21 4y agoSocial security has always been simply a means-tested welfare program like any other we have in the US. The tax to to support it the same thing - just an income tax to balance out the budget. I wouldn't describe myself has having "paid in" to SNAP, or disaster relief funds, etc. Just as I wouldn't describe myself as having "paid in" to social security. I simply paid an income tax at the time like any other. If I'm lucky, when I'm in need some other poor sap will be paying it forward as well.