This comes from a couple of comments on the 10/19 debate thread. Trump has pledged to keep the U.S. Social Security retirement system as it is. Some commentators in the thread said SS is a Ponzi scheme.
I've done propaganda work for the USG, and the theories of Bernays and later "persuaders" are an interest of mine. I know propaganda when I see it.
The "Social Security is a Ponzi scheme" and its sister "Entitlement reform" are particularly pernicious propaganda themes which have grown in the USA over the last 20 years, in a campaign to eventually produce benefits for Wall Street, in obvious ways I will explain.
Social Security retirement works through a system of worker and employer contributions. These special taxes paid under the Federal Insurance Contributions Act (FICA) are divided into components for old age retirement, disability retirement and Medicare. In this case, I am only talking about the old age retirement, which is able to be rigidly applied according to a person's age and level of contribution. Other components, like Disability and Medicare have problems due to the difficulty to control for things like fraud and medical costs. But old age is pretty controllable predictable according to actuarial principles - you can collect when you're 62, or wait for higher benefits later on. You collect according to how many years and how much you paid in, up to a maximum.
The money paid through FICA for SS retirement goes into a trust fund for Old-Age & Survivors Insurance. https://www.ssa.gov/oact/progdata/describeoasi.html
This money is accounted for by the US Treasury as a special debt instrument backed by the "full faith and credit" of the US Government. https://www.ssa.gov/oact/progdata/fundFAQ.html
In this, these securities are, or should be, no different than US Treasury bonds and T-notes traded on the market and bought by the likes of China, Saudi Arabia, and European countries, as well as many private banks and investment institutions around the world. This debt to American workers should no more be "worthless IOUs" than a $100k Treasury bond held by JP Morgan or China, or a $100 bill held by you, for that matter.
Yes, the "transfer" of FICA/OASDI contributions to the SS Trust Fund is an accounting device - so it most money moving in the world today. The Federal Reserve bought billions of US Treasury securities to boost the economy -with money it created out of thin air, not earned by workers and businesses, all as accounting devices done on computers. Are those US Treasury securities now void?
US government debt owed American workers is no different than debt owed JP Morgan, Fidelity Investments, or China. And who is it better for the US Government to be borrowing from, the American worker or Saudi Arabia? So why are we getting this bullshit?
You don't have to be a financial genius to be able to imagine the trillions to be earned by Wall Street in trading fees, fund loads, and commissions, not to mention higher asset prices, in a mandatory system of employee and employer contributions to a 401k-like portfolio of stocks, bonds, ETFs, and mutual funds. That is the main reason for this propaganda theme - shifting the American retirement system from a defined benefit government system based on one asset class (US government securities) to a Wall Street market-based defined contribution plan.
Aside from the usual transaction fees involved in trading securities, funds administered by the Federal employees Thrift Savings Plan are managed by Wall Street entities like Blackrock securities. A bonanza for Wall Street if EVERYONE has to invest in Wall Street.
There are a couple of good reasons cited for a defined contribution plan into the private markets. The best argument is that defined contributions into private equities and debt would provide huge amounts of investment capital which would produce growth and jobs. However, central banks around the world have been printing and pumping money into these markets, without much effect.
There is also the argument that more diversification is safer. But US debt is recognized world-wide as the "safe haven," and if US treasuries collapse in value, how well do you think AAPL, F, T, XOM, or MSFT will be doing in the market?
Obviously, investment in the markets is only as good as the investment manager's judgment and the course of the business cycle. God forbid you have to retire at the beginning of Great Depression III.
It may be that US government debt is too high - it is generally accepted as still less than 100% of national annual GDP, which is recognized as the danger zone. In the debate, US debt was mentioned to be at 86% of GDP. Japan's debt is 174% Italy is around 130%. Singapore is around 109% But Social Security is not the only contributor to government debt. We fought a couple of trillion dollar wars, for example, where a lot of money was pissed into the sands of Southwest Asia. If SS is a "Ponzi scheme," the whole US Government is a Ponzi scheme, based on borrowed money. I would rather we don't borrow money for foolish things like the war in Iraq, or war on Russia, than fuck American workers.
Tell me how I'm wrong, but I just see this a a long-term effort to cash in on American workers and make them poorer in old age.
I've done propaganda work for the USG, and the theories of Bernays and later "persuaders" are an interest of mine. I know propaganda when I see it.
The "Social Security is a Ponzi scheme" and its sister "Entitlement reform" are particularly pernicious propaganda themes which have grown in the USA over the last 20 years, in a campaign to eventually produce benefits for Wall Street, in obvious ways I will explain.
Social Security retirement works through a system of worker and employer contributions. These special taxes paid under the Federal Insurance Contributions Act (FICA) are divided into components for old age retirement, disability retirement and Medicare. In this case, I am only talking about the old age retirement, which is able to be rigidly applied according to a person's age and level of contribution. Other components, like Disability and Medicare have problems due to the difficulty to control for things like fraud and medical costs. But old age is pretty controllable predictable according to actuarial principles - you can collect when you're 62, or wait for higher benefits later on. You collect according to how many years and how much you paid in, up to a maximum.
The money paid through FICA for SS retirement goes into a trust fund for Old-Age & Survivors Insurance. https://www.ssa.gov/oact/progdata/describeoasi.html
This money is accounted for by the US Treasury as a special debt instrument backed by the "full faith and credit" of the US Government. https://www.ssa.gov/oact/progdata/fundFAQ.html
In this, these securities are, or should be, no different than US Treasury bonds and T-notes traded on the market and bought by the likes of China, Saudi Arabia, and European countries, as well as many private banks and investment institutions around the world. This debt to American workers should no more be "worthless IOUs" than a $100k Treasury bond held by JP Morgan or China, or a $100 bill held by you, for that matter.
Yes, the "transfer" of FICA/OASDI contributions to the SS Trust Fund is an accounting device - so it most money moving in the world today. The Federal Reserve bought billions of US Treasury securities to boost the economy -with money it created out of thin air, not earned by workers and businesses, all as accounting devices done on computers. Are those US Treasury securities now void?
US government debt owed American workers is no different than debt owed JP Morgan, Fidelity Investments, or China. And who is it better for the US Government to be borrowing from, the American worker or Saudi Arabia? So why are we getting this bullshit?
You don't have to be a financial genius to be able to imagine the trillions to be earned by Wall Street in trading fees, fund loads, and commissions, not to mention higher asset prices, in a mandatory system of employee and employer contributions to a 401k-like portfolio of stocks, bonds, ETFs, and mutual funds. That is the main reason for this propaganda theme - shifting the American retirement system from a defined benefit government system based on one asset class (US government securities) to a Wall Street market-based defined contribution plan.
Aside from the usual transaction fees involved in trading securities, funds administered by the Federal employees Thrift Savings Plan are managed by Wall Street entities like Blackrock securities. A bonanza for Wall Street if EVERYONE has to invest in Wall Street.
There are a couple of good reasons cited for a defined contribution plan into the private markets. The best argument is that defined contributions into private equities and debt would provide huge amounts of investment capital which would produce growth and jobs. However, central banks around the world have been printing and pumping money into these markets, without much effect.
There is also the argument that more diversification is safer. But US debt is recognized world-wide as the "safe haven," and if US treasuries collapse in value, how well do you think AAPL, F, T, XOM, or MSFT will be doing in the market?
Obviously, investment in the markets is only as good as the investment manager's judgment and the course of the business cycle. God forbid you have to retire at the beginning of Great Depression III.
It may be that US government debt is too high - it is generally accepted as still less than 100% of national annual GDP, which is recognized as the danger zone. In the debate, US debt was mentioned to be at 86% of GDP. Japan's debt is 174% Italy is around 130%. Singapore is around 109% But Social Security is not the only contributor to government debt. We fought a couple of trillion dollar wars, for example, where a lot of money was pissed into the sands of Southwest Asia. If SS is a "Ponzi scheme," the whole US Government is a Ponzi scheme, based on borrowed money. I would rather we don't borrow money for foolish things like the war in Iraq, or war on Russia, than fuck American workers.
Tell me how I'm wrong, but I just see this a a long-term effort to cash in on American workers and make them poorer in old age.