2/7/2005 12:55:20 PM
Letter – Social Security crumbling
I read a recent letter about Social Security reform and was taken aback by the title and presumption that reform is a sham.
Social Security is a sham. According to The American Heritage. Dictionary of the English Language, Fourth Edition, a Ponzi scheme is an investment swindle in which high profits are promised from fictitious sources, and early investors are paid off with funds raised from later ones.
Williams’ call to the Social Security Administration also should have included a discussion on the pay-as-you-go structure of the program, where current retirees’ benefits are paid by current workers’ taxes. When the former number outstrips the latter in 2018, the safety net will fail and a mass deficit upward of $12 trillion will necessitate payroll taxes skyrocketing to more than 20 percent of wages and/or benefit reductions of more than 27 percent.
And that call also should have discussed the rate of return to someone now entering the workforce, where that current $6.20 out of every $100 would yield little more than $5 in their retirement. A checking account would at least break even!
But what is most disconcerting is that more than 40 separate payroll tax increases and multiple benefit cuts have gotten us to where we are today, with 12.4 percent of every worker’s paycheck going toward an empty promise and America staring down the barrel of an unprecedented fiscal challenge.
Social Security is flawed to the core, and without prompt attention by Congress we will continue to rob Peter to pay Paul. Every dollar we are allowed to keep and control to pre-fund our retirements like tens of millions of Americans already do with pensions and 401(k)s, is one less dollar the government owes us in the future.
Wisconsin State Director, FreedomWorks