Tuesday, May 17, 2011

social security

I have never heard anyone, including Ron Paul, say they do not want to meet the Social Security obligation to those dependent on this forced Ponzi scheme.  I have heard of those who would like people to chose to opt out if they desire, I have even heard 40 somethings who would opt out.  
SS is mandated by law to loan any excess funds to the general fund.  The so called trust fund is a stack of IOU's.  

Ron Paul on SS

From Wikipedia

Social Security
Paul says that Social Security is in "bad shape ... The numbers aren't there"; funds are depleting because Congress borrows from the Social Security fund every year to fund its budget.[14] He considers himself the rare member of Congress who has voted for such little spending that it has never required borrowing from existing Social Security funds. To stem the Social Security crisis and meet the commitment to elderly citizens who depend on it, he requires that Congress cut down on spending, reassess monetary and spending policies, and stop borrowing heavily from foreign investors, such as those in China, who hold U.S. Treasury bonds. Paul believes young Americans should be able to opt out of the system if they would not like to pay Social Security taxes, in order to protect the system

More info and quotes from

* Perception about Social Security benefits:

I am entitled to the money. It's my money. I've saved it.[190] [191]

* All taxes that have been paid into the Social Security system since its inception have already been (1) spent to pay for benefits, (2) spent to fund the administrative overhead of the program, or (3) loaned to the federal government.[192] [193] [194] [195]

* The website of United States Social Security Administration states:

There has been a temptation throughout the program's history for some people to suppose that their FICA payroll taxes entitle them to a benefit in a legal, contractual sense.… Congress clearly had no such limitation in mind when crafting the law. ... Benefits which are granted at one time can be withdrawn.…[196]
In 1960, the Supreme Court ruled that entitlement to Social Security benefits is not a contractual right.[197]

└ Taxes on Social Security Benefits

 * Currently, recipients of old-age benefits with incomes of more than $25,000/year and couples with incomes of more than $32,000/year must pay income taxes on up to 50% of their old-age benefits. Half of an individual's or couple's old-age benefits are counted as income when determining if they meet these $25,000 and $32,000 thresholds.[75] [76] These income taxes on Social Security benefits are used to fund Social Security.[77]
* Recipients of old-age benefits with incomes of more than $34,000/year and couples with incomes of more than $44,000/year must pay income taxes on up to 85% of their old-age benefits. Half of an individual's or couple's old-age benefits are counted as income when determining if they meet these $34,000 and $44,000 thresholds.[78]
* The thresholds at which people are required to pay income taxes on their old-age benefits are not automatically indexed to account for inflation or wage growth.[79]

Over payments

Would a private company, who you chose to invest with, get away with this?  Would they have and incentive to not over pay or pay dead people?

* Once the Social Security Administration mistakenly overpays a beneficiary for more than four years, it does not correct the error if discovered, except in cases of fraud.[182] This policy is called "administrative finality," and it is governed by regulations issued by the Commissioner of Social Security,[183] who is appointed by the U.S. President once every six years.[184]

* In 2007, the Inspector General of the Social Security Administration released the results of an audit that found 77,969 Social Security beneficiaries "whose benefit records indicated that administrative finality was involved."

* In a random sample of 275 of these beneficiaries,[185] the investigators found that:

• 57% were paid more in Social Security benefits "than they otherwise would have been paid because of administrative finality."

• 36% "may" have been overpaid because of administrative finality, but the investigators "were unable to quantify the amount because there was insufficient information available."

• 7 percent "were unaffected by administrative finality."[186]

* Based on the overpayment amounts of this survey group, the Office of the Inspector General estimated that as of June 2005, 44,230 active beneficiaries had their benefits

incorrectly calculated, but the Agency did not revise the amounts because of its administrative finality rules. As a result, we estimate these individuals were paid about $140.5 million more in [Social Security] benefits than they otherwise would have been paid had the errors not occurred. We also estimate about 25,801 of these beneficiaries will be paid an additional $49.8 million in the future because their ongoing benefits were not corrected when the Agency identified the calculation errors.[187]

* In the "Conclusion and Recommendation" section of the audit report, the Inspector General wrote that Social Security

beneficiaries should be paid the benefits they were intended to receive based on the formulas provided in the Social Security Act. … By invoking administrative finality and not correcting the errors, the beneficiaries receive extra monies that cost the [Social Security] trust funds millions of dollars.[188]

* The Commissioner of Social Security rejected this suggestion and responded in part:

Correcting a record more than four years in the past could cause undue hardship for our beneficiaries, as well as create extensive public relations issues for the Agency.[189]

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