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Author: DocHollandaise Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 61212  
Subject: Re: Early retirements strain Social Security sys Date: 9/30/2009 5:15 PM
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What you posted is not a "promise" to pay anything to anyone. It is part of the legislative history of the SSA of 1935 taken entirely out of context.

Poppycock. The legislation clearly makes a promise. It still does, even though the many iterations and changes which Congress has wrought through the years.

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Where in the legislative language that you quoted is there a "promise" to pay anyone anything? Nowhere.

It's legislation which if unaltered permits a qualified recipient to receive benefits at a certain level. No different from any other social welfare program. But, it can be changed at the whim/discretion of the legislature. Indeed Congress if it wanted to, could decide to bestow social security benefits on people who have never paid anything into the system at all. It wouldn't make a whole lot of actuarial sense but Congress could certainly do that if they wanted to.

You want to know what a "promise" is? A U.S. treasury bond is a government promise to repay a debt. Backed by the full faith and credit of the U.S. govt. On the local or state level the rough equivalent would be a general obligation bond of the issuing authority.

Now when a worker makes a payroll tax payment each pay period, does s/he receive a bond back from the U.S. government which says "Pay to the order of...." or "Pay to the bearer of..." or "Payable on demand..." or "Payable upon such and such condition..." etc. No of course not.

The worker pays into the Soc. Sec. system because the obligation to pay FICA or payroll taxes is a legal requirement which stands by itself. The worker's obligation to pay FICA is NOT contingent upon a corresponding promise by the government to EVER pay it back. (Certainly there's no "promise" to pay a whole lot more than what was ever contributed.)

A so-called "promise" which can be altered at the whim or sole discretion of only one side of the transaction--in this case Congress--is not a "promise" at all. It's illusory.

Do you know what a "promissory note" is? You know the thing you signed for the bank along with your mortgage. THAT'S a "promise to pay" a sum of money in the future.

We are talking about basic definitions here that you find inconvenient and simply choose to ignore. I know what a "promise" to pay a sum of money by the U.S. government looks like. It looks like a treasury bond. Unless and until the U.S. government starts issuing workers bonds in exchange for their FICA payments you are just kidding yourself (but not anyone else).







Now if you are saying "well, it's a promise that might be broken, someday, maybe", I will have to agree with you. Someday the sun will explode, or a meteor will hit the earth, or a virus will kill all of mankind, and the promise will be broken.

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No, what I'm saying is it's NOT a promise because it never was a promise. Therefore when Congress chooses to change/reduce Social Security benefits they are NOT "breaking a promise" because they never made a promise in the first place. It's one thing to say Congress shouldn't reduce benefits well, just because. But that doesn't mean they broke any "promise" by reducing those benefits.

We have a right to remain silent. We have a right to an attorney. We might even have a right to have an abortion, and we might even have a right to adequate health care.

What we do NOT have is a "right" to Social Security benefits, in the sense that Congress MUST provide them to us in the same way that indigent criminal defendants MUST be provided with legal counsel. For an existing level of benefits and procedural regime, we have procedural due process rights under Goldberg v. Kelly and similar cases. That means if you qualify for the benefits under existing legislation you can't be arbitrarily denied those benefits without due process. It does NOT mean however that Congress is obligated to provide a particular level of benefits in the first place.




That, along with all other "promises" does not make it "not a promise", because the definition of "promise" does not mean infinity, forever, and beyond.

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Well, I think at a minimum any "promise" has to include a binding obligation. Since by definition there is no binding obligation placed upon Congress to provide any particular level of benefits, then there's no binding obligation, hence no promise.





Seattle Pioneer and you seem fixated that because something might change, someday, in some trivial way, that there is not "a promise" to pay benefits under the Social Security system. This is arrant nonsense, hardly worthy of the time I'm taking to type.

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Well I don't speak for Seattle Pioneer, but I think you are a little bit disconnected from reality don't you? If you call up the Social Security Administration itself they will tell you that there is no "promise" to pay you anything in the future and all they can do is estimate your possible future benefits assuming "nothing changes."





And he keeps throwing the word "ponzi" up, even though that is a categorical misuse of the word, but then he thinks it helps his argument to pervert the language, and there is nothing I can do about it. That is unfortunate, for reasonable debate requires a common use of the language, and it becomes clear that he has no interest in reasonable debate on the issue. (For the record: ponzi schemes end when there is NO ONE LEFT to contribute. I am going to presume that there will always be someone working in the United States, and therefore contributing, and therefore (by definition) it will not end, at least until the meteor hits.)

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Well a Ponzi scheme is generally recognized as being when the initial investors are not actually paid a return on their own investment, but rather, paid an alleged return which is actually funds contributed by the "new investors." Seems like a pretty good description of the Social Security system to me. The payments to current retirees are not coming from investment returns of their contributions, but rather, are direct transfer payments from new contributions of the still-working.

This is an odd conversation because I thought EVERYBODY already knew that. Characterizing social security as a Ponzi scheme is a truism, it has all the characteristics of a Ponzi scheme.

And your statement that a Ponzi scheme doesn't end unless there is NO ONE LEFT to contribute not only strikes me as ridiculous, but rather as a wistful, desperate cry from someone who doesn't want to acknowledge the truth of the matter.





This is all uinfortunate, because I used to have some respect for SP, but it becomes clear that he would rather prevaricate, lie, and ignore simple truth than have a meaninful conversation. Sad.

I still have hope for you, however ;)

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Is that a "promise"?
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