Wednesday, September 14, 2011

Ponzi! Ponzi! Ponzi! ~ By John Stossel

In this column, John Stossel starts out with the statement, "People need to hear it." The latest smack-down on the Social Security program is not meant to "scare the old people," but it sure could sway the way people vote in 2012.

The truth may be too severe to have to hear right now, but it is important for people to know it. The Payroll Tax, where employers not only withhold a portion of your paycheck for Social Security (FICA) and Medicare, they must also match that amount of your "contributions" in their payment to the U.S. Treasury, Yes, it's a tax, and as you'll learn in this column by John Stossel, it is not truly a retirement account, nor is it guaranteed for the fact that the plan can be changed at the whim of Congress.

Ponzi! Ponzi! Ponzi!

By John Stossel

September 13, 2011 ~ 4:58 pm Eastern

© 2011

Ponzi! Ponzi! Ponzi! There, I said it. To the extent people believe there are trust funds with their names on them, Social Security is absolutely a Ponzi scheme. So is Medicare. People need to hear it.

Many people think that when the government takes payroll tax from their paychecks, it goes to something like a savings account. Seniors who collect Social Security think they're just getting back money that they put into their "account." Or they think it's like an insurance policy – you win if you live long enough to get more than you paid in. Neither is true. Nothing is invested. The money taken from you was spent by government that year. Right away. There's no trust fund. The plan is unsustainable. Medicare is worse.

Mitt Romney and other Republicans who scoff at Rick Perry shamelessly pander to older voters. They should tell people the truth.

Still, I'm not convinced Perry has more than a sound bite. In his USA Today op-ed this week, the most he says is, "We must consider reforms to make Social Security financially viable." He doesn't say what kind of reforms.


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