SS and Medicare were Ponzi schemes from the beginning and are only now being recognized as such. They were perfect for politicians because they granted immediate benefits, or the promise thereof, and hid the true cost or pushed it into the distant future.
SS allows individuals to contractually count on an annuity for as long as one lives, to be supplemented, or not, by one’s savings and investments. The cost in its first few decades was miniscule–one or two percent of one’s gross, and only up to a ceiling of a low annual income. To further hide the true cost, the government makes the employer pay a like amount for each employee, whose true incidence studies show is a correspondingly lower pay. The full burden is about 13 percent lower pay. Think of what kind of retirement you could have if you invested that percent of your gross every working year up to age 67.
Like so much that government does, it robs people of the incentive to save, to plan and control their own future. It is actuarily unsound in so many ways, and the current recession makes obsolete all recent projections as to when it will self-destruct.
If you are in your twenties or thirties, you are soooo screwed. The greedy geezers, of which I am one, will make you pay taxes up the gazooo to pay for it, then when you are elderly, there will be nothing left.
When I taught economics in the 80s and 90s, I would devote one full lecture to the true nature of SS, and it was always a revelation to the students. I only hope intergenerational warfare is not the result–there is every reason for today’s young workers to be very angry.
