odiousgambit
odiousgambit
Joined: Nov 9, 2009
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August 7th, 2012 at 12:42:09 AM permalink
I didn't know this about Social Security. Most get less than you paid in?

http://www.cnbc.com/id/48533565
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24Bingo
24Bingo
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August 7th, 2012 at 4:34:35 AM permalink
Yes, that would be what generally happens in Ponzi schemes.
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weaselman
weaselman
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August 7th, 2012 at 7:21:22 AM permalink
Quote: 24Bingo

Yes, that would be what generally happens in Ponzi schemes.


As well as in any kind of insurance ...
"When two people always agree one of them is unnecessary"
s2dbaker
s2dbaker
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August 7th, 2012 at 7:38:07 AM permalink
Quote: weaselman

As well as in any kind of insurance ...

I was about to say that. Social Security is an insurance policy that the government requires you to purchase for yourself and your family. If you become disabled and can no longer work, you get benefits like any other insurance policy. No, it's not going broke.
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AZDuffman
AZDuffman
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August 7th, 2012 at 7:52:50 AM permalink
Quote: s2dbaker

I was about to say that. Social Security is an insurance policy that the government requires you to purchase for yourself and your family. If you become disabled and can no longer work, you get benefits like any other insurance policy. No, it's not going broke.



No, it is not an "insurance policy." It is a mandatory benefit program where the new "investors" pay off the old ones, aka a "ponzi scheme." And if you believe it isn't going broke you probably believe Obamacare will reduce the deficit.

The only real solution proposed to save SS was made by Bush in 2006 and would have let people take a reduced benefit in return for a partial private account. Special interests went ape and that was the end of that. AARP and other liberals convinced people that dependency on government was better thana private account you could use and even hand down to your kids when you die.

I am just hoping we do not see a government takeover of 401(k) plans and IRAs as they have done in other parts of the world. It has already been floated here, "voluntary" at first of course.
Tolerance is the virtue of believing in nothing
FleaStiff
FleaStiff
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August 7th, 2012 at 7:56:01 AM permalink
There are different components to social security.

As to disability insurance the same defects of private disability insurance apply: by the time someone applies they may be no longer covered, disability is often masked by dozens of other diagnoses and the amount of the compensation is pitiful.

Oh sure, skiing into a tree can make you disabled but most disabilities are progressive deterioration. Private insurers often benefit from a claimant taking part time work and then the insurer only pays sixty percent of that salary.

Now as to benefits... hah. Look at LBJ... two weeks prior to the election he raised Social Security benefits. ANYTHING that is under that kind of political control has got to fail eventually. The multi billionaire Annenbergs who made so much money publishing TV Guide drew social security payments for years. Everyone wants to draw social security as an entitlement but no one wants to think of it as a safety net applicable solely to the bottommost who were most unfortunate in life during their productive years. Everyone wants to "draw from the well".
weaselman
weaselman
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August 7th, 2012 at 8:30:48 AM permalink
Quote: AZDuffman

No, it is not an "insurance policy." It is a mandatory benefit program where the new "investors" pay off the old ones, aka a "ponzi scheme."


How is it different from the insurance policy though?
Say, you buy a car liability insurance, and wreck someone's Ferrari the next day, dying in the process. The Ferrari's owner gets a payout, financed by the "new investors". Same thing.
"When two people always agree one of them is unnecessary"
AZDuffman
AZDuffman
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August 7th, 2012 at 10:23:32 AM permalink
Quote: weaselman

How is it different from the insurance policy though?
Say, you buy a car liability insurance, and wreck someone's Ferrari the next day, dying in the process. The Ferrari's owner gets a payout, financed by the "new investors". Same thing.



Not really. The Ferrari driver gets paid from the risk pool. Insurance companies invest the pool and pay claims out of it.
Tolerance is the virtue of believing in nothing
weaselman
weaselman
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August 7th, 2012 at 11:03:00 AM permalink
Quote: AZDuffman

Not really. The Ferrari driver gets paid from the risk pool. Insurance companies invest the pool and pay claims out of it.


Just like SSA invest its fund, and pays out of it. It is the same thing.
The only difference is the scale, the amount of risk, and the fact that insurance company does not have to insure you it it believes you are too high risk, and can raise premiums if it thinks it needs more money, and SSN does not have either of these options. So the former makes profit while the latter goes bankrupt.
"When two people always agree one of them is unnecessary"
buzzpaff
buzzpaff
Joined: Mar 8, 2011
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August 7th, 2012 at 11:06:24 AM permalink
I have a problem with LIFE insurance. They want to bet I won't die in the near future.
And i want to bet they are wrong ??

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