SS is fraudulent wealth transfer

["William J. Burrows" <bill_burrows@amecom.com>]

Millions of Americans spend billions of dollars in hope
of winning state lotteries, the chance of which is not much better
than that of walking outside and being struck by lighting. The
fact is that most average young workers could ALREADY have it won
without wagering an additional penny. All they would have to do
is invest the money paid into Social Security by themselves and
their employer (now about $5000 per year on a $33000 salary)in an
average performing mutual fund for the next 30 or so years. They
would easily have, depending on age, income, and future economic
performance, a retirement fund in the million dollar range.

But this is forbidden by a government which has locked
them into a different kind of game, a legalized chain letter or
pyramid which guarantees huge payouts to the first players and huge
losses to latter generations forced to support them. It is a scam in
which workers are forced by law to participate since none would
now voluntarily do so if they realized the true nature of the game.

In 1940 when the first monthly checks were issued, an average
retiree recived about $23 each month, having paid a grand total of
$25 into the system. On average those people lived 12.8 years after
age 65 and collected the equivalent of nearly 1000% interest annually
on every dollar paid in. How could it not have occurred to those who
set this up that something would go wrong with such a scheme. Of
course it did. They intentionally masked their goal of welfare and
income redistribution with falsehoods such as contributions and
earned benefits when in fact they were no such things. They knew
full well that the system  would result in less and less return for
each subsequent generation of retirees but that the day of reckoning
was too far beyond their political horizons for them to be held
accountable. Besides future generations were not around to protest
the servitude to which they had been commited. Subsequent politicians
doled out even more generous benefits without requisite payments.

Thus for fifty years, we have had in place a fraudulent system of
wealth transfer where every retiree has received and now receives
far more than a fair return (including real growth and inflation).
Each generation is called on to pay a greater portion of their income
to support those who did not.

An average 1970 retiree collected easily 10 times the value
he would have if all of his lifetime taxes had been invested and the
resulting amount used to buy an annuity. A recent retiree will not
do quite as well but will still collect several times the annuity value
that his taxes would have otherwise bought particularly if he has
a retired spouse. An average 2020 retiree will receive less than
80% of the projected annuity value of his taxes(i.e. anegative rate of
return), and that only if future workers are willing to pay much greater
portions of their income.

The generation that has payed in the most will receive the least
return for it. This is nothing short of theft; of an individual's
wealth, of his productive efforts and, of his earned security.
It is wrongful transfer of income from those who have earned it to
those who have not. Every senior who screams loud and long in
defense of the current system is part and party to this theft. They
knowingly refuse to acknowledge the deception with claims that they
"paid in all those years" when many in fact did not, most paid in
little, and none paid in even close to enough to earn their benefits.
They refuse to even admit the enormous burden on today's workers knowing
full well that we are paying in 100 times as much as they did in 1950
and will receive only a fraction of their return. They should know
that it is their own children and grandchildren that they are
impovershing.

Wake up, twenty, thirty, and forty somethings. You are
faced with CERTAIN loss of hundreds of thousands of dollars
in retirement income and almost certain tax hikes.
The chain letter is running out and we are on the bottom.

If there is anyone listening in government who cares beyond
the next election, who has a notion of equity or honesty, I
believe the following actions will do the most to restore some
balance in the system and lead to its eventual stability.

1. Immediaty freezing of benefits to current recipients with
termination of all COLA. No one should get any adjustment in
benefit unless and until it is below the fair annuity value of his
payments (including inflation).

2. Removal of all SSI benefits from the Social Security program.
No one has a right to claim benefits not earned. Those individuals
may apply for need based welfare, but masking welfare to them as
earned benefits is an affront to every taxpayer.

3. Adopt a new benefit schedule for all future retirees yielding
a fair annuity based benefit based on the value of his contributions.
This will save hundreds of billions in future outlays. Anyone truely
poor could apply for means tested welfare programs.

4. Reduction of current taxes from 7.65 to 5.0% and lower as
finances permit with abandonment of the current surplus. This money
is not being saved and invested for future retirees and only serves
to mask both the actuarial imbalance of Social Security and the total
budget deficit. This is also essential so that the next generation
will "owe" less to current workers. The cost will largely by offset
by the first three recommendations.

5. Revise the requirements for disability to remove millions of
phony claims including drug addicts, alcoholics, and sore backs. Only
those totally disabled due to no fault of their own should receive
benefits.

6. Begin a system of buyouts of willing workers thru use of future
tax credits. This mechanism is beyond the scope of this comment but
has been proposed by many knowledgeable experts.
	
7. No raise in the retirement age should be made beyond the 67
of current law. The average life expectancy after 65 has only
increased  a few years in the last 30 and is stabilizing. Raising
the eligibity age will only worsen the already dismal return that
predicted for future retirees.

In his landmark 1980 book, Social Security, Inherent
Contradiction, Peter Ferrara says it about as well as any have.
"The social security compact between generations is itself a contract
corrupted by self-dealing. The first generations [have] taken unfair
advantage of the absent generations. Under traditional principles
of equity, therefore, the 'compact' is unfair, immoral, fraudulent,
and voidable."