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Author: piz Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 122325  
Subject: Re: To convert or not to convert? Date: 8/14/1998 3:34 PM
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DowDanny wrote:
regarding SS contributions and payback:
>> It's more like a pyramid scam <<

Hell NO ! It is a pay-as-you-go insurance program that has been designed as a redistributive tax. Go ask the SS commisioner if it is a 'retirement account'... the answer is NO. Who told you it was ? Your payout benefit is indeed 'related' to your contributions, but there is NO one-to-one relationship between your tax dollar paid today and the dollars you'll get (AS IF) later. You can't follow your money through the chain, anymore than you can follow your contribution to the national defense, or the US Highway you cross on the way to work, or your FannieMae guarenteed mortgage. Sorry.

Somewher else we can debate whether or NOT it is a good idea to redesign SS to be more of an 'individual account' type system, but FOR SURE, it is NOT one now.

If you read the whole of my post you'll see that I'm not claiming that it is like a retirement account, but that it's not:

Don't forget that SS is not at all like an investment account, where the money you pay in accumulates, eventually being drawn out to pay your benefits.

And I still think it bears a strong resemblance to a pyramid scam - the ones getting the most out of it are the ones who got into it first. Every wave of new participants gets less and less.

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