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URL:  http://boards.fool.com/no-insurance-plan-offers-to-pay-you-a-fixed-25195845.aspx

Subject:  Re: Such different conclusions Date:  2/20/2007  1:31 PM
Author:  Goofyhoofy Number:  2564 of 61287

No insurance plan offers to pay you a fixed annuity, and then increases it repeatedly over the years

Sure they do. The private market has them all over the place.

Here's one from United Heritage Insurance which offers an annuity payout with a cost-of-living escalator.
http://www.unitedheritage.com/portfolio/Ann_Spia.htm
Here's some info from Cornell on COLA's with such products:
http://www.law.cornell.edu/uscode/5/usc_sec_05_00008340----000-.html

ears and adds a comprhensive medical care benefit to that as well

For the 900th time, Medicare is not part of Social Security. It is not administered by the Social Security Administration, it is not enabled by the same legislation, there is no connection, capiche? You might as well try to tie Social Security with tobacco price supports.

You can keep calling it insurance if you like, but you can't show me any similar actual insurance plan. And that's because you are paying out enormously more in benefits than people have paid in.

You have this exactly wrong. We are paying out less than people have paid in. It's just that Congress keeps spending the excess on stupid things like wars and stuff.

If Gen X, Y and Z compel government to free them from paying taxes into that system, it collapses almost immedietely, like any Ponzi scheme.

Here's a news flash for you. If everybody lines up at the bank and wants their money, the bank collapses immediately - or at least did until the government invented the FDIC. Does that make banks "a ponzi scheme"? Here's something else you might not know: insurance companies don't have all the money that might be required to pay off their obligations, either. They keep "reserves" of about 30% of obligations, and pay the rest from investments, future cash flows, and so on. If insurance companies kept all the money in a vault in the basement someplace in case everybody stopped paying, but they still had to pay out, then no insurance company would ever go out of business. Why would they? They would have all their obligations already covered down there in the basement.

So calling it insurance doesn't make it so.

It is if that's what it is. Say, what do you suppose the "I" in SSI stands for?

and for Jim2B:

H and nearly everyone else here continues to ignore is that the benefits paid by these programs can be changed by Congress at any time.

Sure. And an insurance company can go upside down tomorrow. Ask my mother. She bought a "safe" annuity and had the company go bankrupt within a year. Nothing is perfect. Why do you demand perfection from SS when you don't from the alternatives?
 

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