The "Sacred Cows" of Government:
Social Security
|
|
First of all, what is "Social Security" and why does it cost so much?
Firstly, it is the costliest Federal expense, and according to the graphic above, will grow by 77% in the next 10 years! But what is it?
|
During the Great Depression of the 1930s, the Federal government found that the elderly (old people), especially, had no long-term savings accounts! They were old, couldn't work, and therefore, were dependent on others to support them (see the cartoon on the right).
So, in 1935, the Federal government began to mandate that everyone start saving a small percentage of their paycheck (somewhere between 7 and 12%) later in life. Then, when they retire (usually at age 65...), they have some money to live on! This worked very well, for awhile. The average "age of death" was in the mid 60s, so people retired, lived a few years on that money, and then died... |
|
But then life expediencies changed! Today, the average American lives to be almost 80 years old today! That means that they're living 15 years longer! So...in summary, that money is running out! The cartoon above expresses the terrible fact that all of the money in Social Security will run out in the year 2033. Why, though? Examine the video GIF below:
Feel free to stop the above video from time to time. But, what's it saying? Well, this is the way Social Security works, and also, why it's failing:
- The Federal Government mandates that you give a portion of your paycheck to a Social Security account,
- ...and for every paycheck, until you retire (usually at 65...) , this process will continue.
- When you're 65, you have a large savings account to "live off of"...until you die! Depending on the account size, it can be a few thousand dollars per month!
- But...this account is "finite"; it doesn't grow after you access it. So, for people who live to be 68 years old, that's fine! You have three (3) years of savings, and then you die!
- ...But what about the people who live longer, perhaps to 85? When that money runs out, how does the government pay you?
- ANSWER: With someone else's Social Security payments! It's actually quite "genius". That "young worker" can't access this money until he retires, so the government will give you his money, and when he retires, he'll give them someone else's money to make up for it. Banks do this all the time: take money from others, loan it out, and do it all over again. If this seems unfair, check out the cartoon below. It might just be, cuz that's what a Ponzi Scheme is!
- But...quite frankly, there are too many people "needing" Social Security, and there's not enough money to pay them!
- So...that's why you have the above cartoon: Social Security, and all of its money and all of its loans, will run out, in about 15 years, or so...
So...what can you do? Answer: Not rely on just Social Security for your retirement! Save more, invest more, and you'll be fine.
But that's not the point of this activity: We need to come up with a "solution" to this "Sacred Cow" problem. The government "pays" $845,000,000,000 per year in Social Security in the form of monthly checks, But suppose we could "start over"....
Come up with a "solution" for "old age" retirement and explain it to me. How would you make sure that "old people" have enough money for retirement? After all, they're not working, so how will they make money?
Additionally, would you "continue" the Social Security program? Abandon it altogether? Or tweak it a bit? Tell me what you'll do...and how you'll do it!
But that's not the point of this activity: We need to come up with a "solution" to this "Sacred Cow" problem. The government "pays" $845,000,000,000 per year in Social Security in the form of monthly checks, But suppose we could "start over"....
Come up with a "solution" for "old age" retirement and explain it to me. How would you make sure that "old people" have enough money for retirement? After all, they're not working, so how will they make money?
Additionally, would you "continue" the Social Security program? Abandon it altogether? Or tweak it a bit? Tell me what you'll do...and how you'll do it!
