Last week, Alex Tabarrok wrote a position as a Marginal Revolution.Is social security a ponzine system?‘
His answer is.
In 2001, I reminded me of what I wrote about social security. Joy of freedom: Economist’s Odyssey.
Next is the beginning of the intestine.
I scratch the present [Social Security] If you change the system to the system, add a name to the bottom of the list, send money to the person at the top of the list, and then replace you. . . Oh, wait, it is our current system.
—Barry, “Elections can be able to kiss most orifice.” Miami HeraldSeptember 24, 2000
In 1991, Stephen Banus, one of my students, wrote a letter to the Social Security Bureau to the Social Security Bureau and the Social Security Bureau, which asked for information on the benefits he could receive. Gwen Dollyn King, the head of the social security director, wrote again in a letter form.
I would like to be sure that social security is based on sound financial foundation. There will be social security benefits when needed.
Banus, a prudent person and a good planner, sent a similar request in 1995. This time, the message of the letter form was different. Shirley Chater Social Security Director wrote:
According to the latest report of the Social Security Council, the social security system can benefit for about 35 years. This means that Congress has time to make changes to protect the financial future of the program.
In just four years, the commissioner reduced the blanket confidence that in just four years, the benefits of “when needed” would be “about 35 years”. What happened between 1991 and 1995?
In fact, nothing happened for four years, except that the director of the Social Security Bureau in 1995 was more frustrating than her opponent in 1991. The fact is that social security is never on a “sound financial foundation.” Unlike the official propaganda of the Social Security Bureau, there is no real trust fund. About 80 %of the salary taxes collected from workers are sent to the current retiree as a simple stay in Washington. The government spends the remaining money on other items. The so -called trust fund includes bonds created by the government. This bond is simply iOUS from another branch of the government. Chris Zehn, the deputy director of the parliamentary budget office, compares these bonds every year and compares them with a note that puts their children’s university education boxes. The memo says, “I am owing $ 5,000 for my daughter’s college fund.” After 18 years of savings, when the child is 18 years old, he opens a box and has 18 useless piece of paper, not $ 90,000.
Those who retired in the early 1940s have benefited from paying low -wage taxes for only a few years. However, these retirees have received much lower profits so that the system is “maturity” so that the current retirees pay their social security tax on their entire labor life.
Civilians who founded such a financial chat will go to prison. In fact, he did. His name was Charles Ponzi, and he was arrested as a promising investor who could double the money in 90 days in 1920, and later used the proceeds of the participants to keep his promise. Therefore, it was born under the term “Ponzi Scheme”.
There are two main differences in Ponzi’s original morale and social security system. The first difference is that social security is operated by the government, and the constitution and suspicious ethics are legal. The second difference comes from the first. Ponzi had to rely on the sucker, but the government can use and use power. It is true that the government mentions social security taxes. About 10.6 %of the income of all workers to all workers’ income for all workers in 2001 means “donation” with 1.8 %, 2.9 %for 1.8 %for disability insurance. But don’t contribute. It was in 1961 that Valentine Byler, Amish Farmer in New Will Mington, Pennsylvania. His religion taught that members should take care of each other and tried to act on religious beliefs by not paying social security taxes. The IRS responded by seizing three words and selling $ 308.96 for unpaid taxes.
The new line of social security stations is that the fund is solvent by 2037. In fact, government officials, which mean, will be sold to the US Treasury, the end of the special federal government bonds that the Social Security Bureau thought and maintained by 2037. The “sales” of this bond is simply a transfer between the government’s left hand and right hand. In order to secure cash for this bond, the Treasury must rise, increase taxes, or reduce other expenses.
Therefore, more relevant dates are when the government’s salary pays began to exceed interest on pay taxes and bonds. In other words, it is when the bond is first sold and the government has to pay extra cash. The date of the date will be the current project, and the retirement of the baby boomers will be about two -thirds.
In the late 1990s, the government’s own insurance acts estimated that in order to maintain the promised benefits, it should rise more than 18 % from 12.4 % from the current level in decades. At 18 %, social security taxes will be about 7.5 %of the total GDP. However, not only social security taxes, but all sources of federal income have been maintained within 18-20 %of GDP since the early 1950s. If this historical constant is maintained, the social security program alone will account for about 40 %of the total tax revenue collected by the federal government, and the remaining 60 %should pay for interest on medical, debt, defense and federal government. It doesn’t seem to be unlikely. In other words, the probability of raising the social security tax rate means that it is quite small. Therefore, at some point in the future, benefits should be less than promise.
