Friday morning the Schuykill Expressway was jammed again due to an overturned car at Belmont Avenue. My first thought was how anyone could turn their car over at the usual 25 mph speeds on the Schuykill Expressway. My second thought was that I was damned to having to take the route from 69th Street in Upper Darby down Chestnut Street (aka The 30 Blocks of Squalor) to work. I was still steamed by Obama’s $450 billion “JOBS” plan. His new plan was touted as an infrastructure plan when it is nothing but a “screw future generations” plan. Do these politicians have no shame?

Obama and his minions will tell you that Social Security is a fantastic program. It should not be touched. They declare that it is self funding. That is a bold faced lie. The Social Security Trust Fund has a $17.5 trillion unfunded liability. This is why:

“A male average earner who retired at age 65 in 2010 paid out $345,000 in total Social Security and Medicare taxes, but will receive $417,000 in total lifetime benefits ($464,000 for a woman).

A much bigger disparity in taxes versus benefits occurs for couples. In the case of a household with only one wage earner, the taxes paid out were $345,000, but the benefits received by both parties will be $778,000. For two-earner couples where one earned the average wage and the other earned a low wage ($19,400), tax payout was $500,000, but benefits will be $800,000.

Those who retired in decades past saw much bigger returns for their payroll tax investment. But clearly this situation is not sustainable. It’s like putting all your expenses on a credit card knowing full well you don’t have the means to pay it back.” – Bankrate.com

We have 10,000 people every day turning 65 years old for the next 19 years. These people will be taking $70,000 to $150,000, on average, more out of the Social Security Trust Fund than they put in. This worked just fine when there were 16 workers contributing for every 1 retiree in 1950. It doesn’t work so well when there is only 3 workers for every 1 retiree, as there is today.

The twits that present themselves as journalists in the MSM have been foaming at the mouth over the description of Social Security as a ponzi scheme by Rick Perry. How could this man tell the truth about FDR’s beloved legacy? After trying to poke holes in Perry’s truthful assessment of this bankrupt program, the pundits declare it isn’t a ponzi scheme because Social Security isn’t voluntary, and a ponzi scheme is. These morons are right. Social Security is a ponzi scheme with a gun pointed at your head by Federal Government thugs. That is a much more accurate description.

The party that presents Social Security as a well run outstanding example of government at its finest has decided the best way to create jobs is to double down on you paying even less in payroll taxes than you did this year. We know for a fact the average person will get between 25% and 125% more than they paid into Social Security. The Obama plan last year and again this year is to drastically reduce the amount paid into the Trust fund, so you can have the privilege of consuming the same amount of food and energy at a much higher price. Brilliant plan! It is amazing how liberals and Keynesians can have such disregard and scorn for future generations who will be handed this bill with no means to pay.

The Republicans went along with the 2011 payroll tax cut of 2%. They will go along with the 3.1% payroll tax cut. You see, this is how politics works. Since the payroll tax was “temporarily” cut, whoever lets the payroll tax cut expire will be declared a tax hiker. Therefore, the “temporary” payroll tax cut will be extended indefinitely, further impoverishing future generations. Meanwhile, how many jobs did the first payroll tax cut create? How many will the extended and increased payroll tax cut create? None! Obama is using the George Bush tax rebate check method of destroying the country. Both decided to address a government spending problem by reducing revenues. This is par for the course and explains why the economy is teetering on the verge of collapse.

The Obama plan consists of $225 billion to screw future generations so we can spend today. It also includes $62 billion to pay people who aren’t employed for 99 more weeks, even though Federal Reserve studies have proven that extending unemployment keeps the unemployment rate 1% higher. Paying people for almost two years while they are not employed is somehow supposed to “create” jobs. Then we have the traditional $70 billion transfer from our Chinese lenders to Timmy Geithner and then into the pockets of state government union workers across the land. Obama needs those votes in 2012. Why should states be required to adapt their budgets to reality when their sugar daddy can keep supplying the candy?

The last chunk of change in the Obama stimulus plan will be $100 billion for some more shovel ready infrastructure jobs. This line was used to snow the American public back in January 2009 when Obama’s $800 billion porkulus bill was rammed through with no Republican votes in the House and only two RINO votes in the Senate. I’m sure you’ve benefitted greatly from the first round of shovel ready jobs. I know the $300,000 funneled to my township to double the size of a parking lot at our local park, which will be utilized on possibly 3 days per year, created a huge boom as the multiplier effect promised by Keynesians revitalized our local economy. 

As I drove down Chestnut Street through West Philadelphia on Friday I observed the result of Obama’s previous infrastructure stimulus plan. Prior to Obama’s 2009 stimulus, Chestnut Street between 69th and 39th (30 Blocks of Squalor) was pocked  with potholes and the sidewalks were crumbling, uneven and littered with trash. This entire stretch of highway was repaved with a thin layer of blacktop in the spring of 2010. Wheel chair ramps were built on every corner of these thirty blocks. Another example of government at its finest, as the Americans with Disabilities Act was only passed twenty years prior. The insanity of installing wheel chair ramps on every corner without repairing the lopsided, crumbling, trash strewn sidewalks leading to the wheel chair ramps is lost on the government drones.  

A little over one year since this fine example of Obama infrastructure spending I was able to make some revealing observations that can be applied to our country in general. I counted the number of holes that had been dug in the newly paved street as I slowly proceeded down this 30 Blocks of Squalor. I was able to do this because the City of Philadelphia government drones are incapable of properly timing the green lights to allow for a smooth flow of traffic.

In the space of 30 blocks there were 20 holes that had been dug and refilled. It seems you can make a highway appear shiny and new by putting a thin veneer of blacktop on the surface but below the street you still have rotting water pipes and decaying sewer systems. This symbolizes the thin veneer of big government solutions for America’s deeply rooted fiscal problems. Short-term Keynesian ephemeral stimulus injections are chosen over long term structural fixes. The result is the true infrastructure of this country continues to deteriorate, spring leaks and rupture at the most inopportune times.

The politicians will continue to try and give the appearance of fixing the structural problems in this country, while putting nothing but useless patches on broken systems and using hype and misinformation to sell their glossy veneer of deception as solutions. Obama has chosen to screw future generations in order to try and get re-elected in 2012. What a great American visionary leader he has proven to be.         


  1. Social Security is indeed a Ponzi scheme, and anyone that denies that simple reality needs to put the crack pipe down.

    As for the latest attempt to create jobs through government fiat, I can only stare in wonderment at the insanity of it all. It should be obvious that Obama is merely trying to buy an election with borrowed money. His claim that it will be paid for is laughable. What a tool.

    Got gold?

  2. “A male average earner who retired at age 65 in 2010 paid out $345,000 in total Social Security and Medicare taxes, but will receive $417,000 in total lifetime benefits ($464,000 for a woman).”

    No problemo. I’ll happily take back my purloined $345,000 and call it a day. Ok gov? Just give me MY MONEY back and don’t worry about sending me any SS checks. Deal?

  3. [email protected] says:


  4. Your quote form Bankrate omits the little fact of compound interest. I started working and paid social security tax when I was ten years old.

    $345,000 at 4% interest for 10 years would be $510,684 ($165,684 interest) They had my first contributions for 52 years. I think if I were to take the time to compound and use rates that approached 10% during some of that period. I’m getting a very poor return, and no excessive gains. Plus it will be taxed, as I worked hard and have other retirement assets.

    If you want the truth, never listen to a banker.

  5. TT

    Sorry. Congress spent your contributions. They weren’t sitting in an account earning interest. Your interpretation of how it works is touching, but false. There are nothing but IOUs in the lockbox.

  6. I recently watched the Larry King interview/debate with Ross Perot and Al Gore again. It was amazing seeing Ross Perot speak the unvarnished truth, while Al Gore slowly and patiently spoke to Perot like he was a toddler.

    Gore, like a preschool teacher feeding a child his mashed bananas, fed the audience spoonful after spoonful of pure bullshit, especially about how the Social Security Trust Fund was in a “lockbox”. Over and over again he repeated the term “lockbox”. What a scumbag.

  7. I’m convinced the government is going to simply print the dollars needed to pay the benefits and the inflation be damned (until they destory the currency). Marissa, you can have your $345k but it’s going to be in highly devalued dollars which won’t buy much.

    Printing – It’s the only play left.

    If they cut the budget by the required amount (1.5 T) it’ll take a huge chunk out of GDP and probably put us into a delfationary spiral.

    Only alternative is to print. Get your gold while you can.

  8. TT

    Perhaps you overlooked the cohort that came before you. I haven’t found a population distribution for 1937 yet, but the approx. national popultion was about 128 million. It’s hard to make a 4% return on your money when your and mine ‘contributions’ were going out the trust fund door to those who came before.

  9. I agree, it was spent by the government, and is now only worthless IOU’s. Still, IF I were to collect anything, it would be less than the fair market value of what I contributed.

    The point made in the essay citing the bankrate reference is we would NOW collect more then we contributed, it is false if you consider any reasonable rate of return, even just inflation.

    The fact is the government spent the money and it cannot be paid back in currency that has any value.

  10. TT

    Thanks for the response.

    One other depressing factor is long-term inflation. Taking 1948, the year I got my SS card, $1 then is ‘worth’ $9.37 today in buying power. [BLS]

    That original dollar at 4% over 63 years = $11.83 so that would have made a difference if the original scheme had been honest. But they couldn’t even get it right, out of the gate. Back then,1936, you paid income tax in the next year. And one of the Brain Trusters pointed out, Hey, a withholding in 1937 and ’36 tax bite is a double-dip which won’t endear the people to this new scheme.

    Starting out with a fiscal deficit did not bode well for the future.

    At least it wass a different ploy that Otto von Bismarck, who promised his people an aged pension at age 60, when the average lifespan was 46. LOL.


  11. I don’t know where they came up with $345K. I have , at least, been an average earner for the last 48yrs and my “contributions” have been $250K. This actually maskes it worse. Retire at 65, draw $2K/mo for 20yrs=$480 big ones. Throw in a million or so/person in Medicare, and yup, we are truly fucked.

  12. Alan Greenspan said:

    “I believe that we should maintain the principles of Social Security, but I think the existing structure is not working. Until we construct a system that creates the savings that are required to build the REAL assets, so that the retirees have REAL goods and services. We don’t have a system that is working. We have one that basically moves cash around and we can guarantee cash benefits as far out and whatever size you like, but we cannot guarantee their purchasing power. Do we have the material goods and services that people will need to consume, not whether or not we pass some hurdle with respect to how legal financing occurs. Financing is a secondary issue and it is a means to create the REAL wealth, not an end into itself.” -Alan Greenspan 2005

    This is as close as you are ever going to get a banker telling you the truth. In this brief clip Sir Alan Greenspan admits that we have a Ponzi Financial system that does not create REAL wealth. “We have one that basically moves cash around .” If the Social Security is fundamentally flawed, the entire US Economy is fundamentally flawed. This financing mechanism the Fed provides creates NO REAL WEALTH, it merely creates cash out of thin air. Social Security then takes that cash and sets up a generational Ponzi Scheme to take from those that are working, to those that are not. Please don’t tell me that you paid in and that you are just taking out. The money that you put in years ago, got paid out almost immediately to those that were taking from the system back then. Those of you that are collecting money, are directly from workers who are working right now. What is worse, now we are paying people now on money we have not even collected yet. With 80 million baby boomers coming to take from from the Ponzi scheme this will end as badly as it did for Bernie Madoff’s victims. (Read:The Shock of a New Paradigm.)


  13. “A male average earner who retired at age 65 in 2010 paid out $345,000 in total Social Security and Medicare taxes, but will receive $417,000 in total lifetime benefits ($464,000 for a woman).”

    A male average earner bought a $1 million dollar whole live policy for $345,000 and died at age 67. His beneficiary received a payout of $1 million dollars.

    Maybe your money should have been sent to an insurance company and been invested according to government regulation, rather than with an unregulated government that stole the money and spent it on shit for their benefit.

  14. When I hear the older generations spout off about how it’s the duty of the younger generation to provide for them, I always ask a few questions.

    “What has your generation done that warrants the younger generation support of you?”

    “What is the condition of the country you have left for the my generation to inherit?”

    “Why should I support a profligate and decadent generation who has squandered their wealth and has consistently failed to take responsibility for their actions?”

  15. Alan Greenspan: No agency of government can overrule actions the Federal Reserve takes. We do what we want, nothing else matters.
    In other words, the Federal Reserve System is a government onto itself. No more ‘Federal’ than Federal Express, as they say.
    http://www.youtube.com/watch?v=3QkmLnNEvdU – Baby Blythe (ZH) digged this jem.

    Peace and Prosperity !

  16. Is this misuse of federal stimulus funds ? Buying 2004 commercial wind turbines with 2010 stimulus funds ?

    How to purchase something twice in Massachusetts using a semi quasi state agency !

    How in the world did the Town of Falmouth buy two turbines in 2010 valued at 5.2 million each through the MTC ? The Massachusetts Technology Collaborative bought these two turbines in 2004 and kept them in a warehouse at $3300.00 per month until the politically embarrassing turbines were sold to the Town of Falmouth through some Beacon Hill backdoor deal with our federal funds in 2010.

    How did stimulus funds get used for two turbines that were so old they had NO warranty left on them ? These turbines were sold like a used car !

    The federal prosecuters need to probe this whole deal !


    Notice of a Regional Project Waiver of Section 1605 (Buy American) of the American Recovery and Reinvestment Act of 2009 (ARRA) to the Town of Falmouth, MA

    AGENCY: Environmental Protection
    Agency (EPA).

    ACTION: Notice.

    SUMMARY: The EPA is hereby granting a waiver of the Buy America requirements of ARRA Section 1605 under the authority of Section 1605(b)(2)[manufactured goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality] to the Town of Falmouth, Massachusetts for the purchase of a foreign manufactured wind turbine to be installed at its existing wastewater treatment facility


    Friday, August 8, 2008

    MTC puts mothballed wind turbines on auction block

    As a result, the two turbines, originally purchased in 2005 for $5.2 million each went on sale last week

  17. There really should be a military draft.It would give younger folks a chance to see how the government works.Also would make it less likely for us to go to war(well declared wars anyhow)Mabe force people to see the government for what it is.

    1. Thinker

      After seeing the crowd at the debate cheer the execution question before Perry even answered, I’m convinced the country will turn to this guy. I’m afraid he will be our Fourth Turning Prophet leader. God help us.

  18. Obama. Sigh!! I am too tired to rant against him anymore. I mean, what’s the point?

    Being filled with the Holy Spirit today, I can only quote Scripture from the King James.

    And he said, Who art thou, Lord? And the Lord said, I am Jesus whom thou persecutest: it is hard for thee to KICK AGAINST THE PRICKS.” —– Acts 9:5
    This is how I know the Bible is true. The above scripture was written over 2,000 years ago. Yet, the Lord even waaaay back then made reference to Obama. Praise God, Hallelujah.

  19. @ Stuck – Ha-Ha! That’s pretty funny. Thanks to you, I actually looked up a Bible verse today. I thought maybe you were just having a little fun, or taking some artistic license, but, no, the Bible says exactly what you say it does.

    Good one!

  20. Rosenberg On The Latest Helping Of “Smoke And Mirrors” From Obama

    Submitted by Tyler Durden on 09/12/2011 14:25 -0400

    If you feel like the market took one sniff at the much anticipated Obama, cue horns, bassoons and oboes, “American Jobs Act”, and threw up all over this latest Keynesian abortion, you are not alone. Here is David Rosenberg explaining how, unlike Goldman which thought the plan is more than expected, is actually nothing more like a tiny flatulent wind in a feces-storm. He summarizes it best: ” I’ll put it to you this way. Assuming (i) that the House Republicans do not accept the Obama spending measures, and (ii) half of the tax relief goes into savings and debt reduction, then we are talking about the grand total of $35 billion of net new stimulus from this “jobs plan”. That’s principally because so much of it is merely extending what is already in the system. At an annual rate, that is a 0.2% boost to baseline GDP growth. In other words: much ado about nothin’. It doesn’t even come close to offsetting the ongoing drag from the retrenchment at the state and local government levels.” So anyone looking for an explanation why the market is down 4.3% since Thursday, here it is. And what is more disturbing, not even rumors of additional QE on top of the widely priced in Operation Twist, have had any impact. In other words, the time for another Hugh “I suggest you panic” Hendry soundbite is nigh.

    From Gluskin Sheff’s David Rosenberg


    That is how we would describe the Obama “jobs plan”. Much of it is merely rolling over existing tax relief passed in late 2010, such as payroll taxes for workers and extended jobless benefits.

    I’ll put it to you this way. Assuming (i) that the House Republicans do not accept the Obama spending measures, and (ii) half of the tax relief goes into savings and debt reduction, then we are talking about the grand total of $35 billion of net new stimulus from this “jobs plan”. That’s principally because so much of it is merely extending what is already in the system.

    At an annual rate, that is a 0.2% boost to baseline GDP growth. In other words: much ado about nothin’. It doesn’t even come close to offsetting the ongoing drag from the retrenchment at the state and local government levels.

    The employment impact will also be negligible since labour costs were only cited by 6% as the primary concern among small businesses in the most recent National Federation of Independent Business (NFIB) survey. No wonder the equity futures barely responded after the speech … this is a huge non-event.

    It is incredible how many resources Wall Street and Bay Street economists are expending to research this initiative, especially since so much of it will never see the light of day. Then again, look at all that wasted time spent on Sunday conference calls the weekend after the U.S. credit downgrade, which was never ratified by Fitch or Moody’s.

    But the bottom line is that this “plan” isn’t even much of a “re-election” plan either. It barely moves the needle. We may well be charitable about the assumption that half the tax relief gets spent. Look up the term “Ricardian Equivalence” — if people see this as the short-term gimmick that it is, basically raiding the Social Security fund, which everyone knows is going to have to get refilled, then very little of this relief is going to be spent.

    In fact, because everyone was so focused on repairing the balance sheet back in the spring of 2008, of the Bush tax rebates that got everyone so excited about (which boosted disposable income at an epic 84% annual rate in May of that year) 17% was spent and 83% was either out in the cookie jar or used to pay down debt. The legacy of that policy move was to boost the personal savings rate temporarily, from 3.9% in April of 2008 to 6.1% as of June.

    If, in fact, households behave as they did in the opening months of 2008, then in actuality we could be overstating the overall macro impact of this so-called stimulus plan. Again, assuming that the spending proposals are dead on arrival at the House floor, then all we are likely talking about in this scenario is a microscopic $12 billion add to GDP. In a $15 trillion economy, that can be considered nothing more than a rounding error.

    Moreover, the entire tenor of last Thursday’s speech was off base. When Mr. Obama rails at the “rich” (making $250K may mean you own the biggest mansion in Des Moines, but in New York City it may get you a parking spot in Tribeca) and “rich” oil companies, he misses the fact that over 50% of Americans don’t pay taxes. This group does not include the “well off” either, no matter how the White House wants to define it. That’s the issue — the middle class actually is very under-taxed relative to Canada and most other jurisdictions in the OECD. In fact, outside of Greece, the United States, for all its ingenuity, may well have the most inefficient tax structure in the world. It should be pulling in more in revenue, but when tax expenditures, or loopholes, cost the Treasury more than $1 trillion annually, something is definitely wrong.

    Besides the fact that there is such a strong lobby group in the form of the National Association of Realtors, and that for some reason homeownership is considered more sacred than even mom’s apple pie, how can mortgage interest deductibility AND tax-free capital gains on the same principal residence be justified. A subsidy for a place that you live in isn’t an investment?

    Nor does housing even add to the productive capital stock. It is, at its root, a consumption good. Why not give tax write-offs for SUVs and iPads while you’re at it? The premise that homeowners make better citizens than renters was never adequately proven either, and in fact, the term “strategic defaults” was never a reference to apartment dwellers, come to think of it.

    Here is what a drive towards sustainable economic growth should look like:

    Make everyone pay a flat tax of 20% and get rid of the rest of the tax code.
    Go back to the drawing board on Obamacare. It’s a job killer.
    Extend retirement age for social security.
    Extend the age for eligibility on Medicare, and reduce Medicaid.
    Take these savings and embark on a real energy infrastructure program: build massive wind and solar farms, and give massive incentives to gas producers to produce gas, change the fleet for truckers and buses all over to natural gas and switch a massive portion of electricity generation to gas turbines from coal fired.
    Take revenues generated from a recovery and rebuild schools and give grants for re-education for construction workers to private firms who could do a better job than the government.
    But the President, unfortunately, passed up the opportunity to do these things. As such, look for the economy to get worse. A hard-nosed Republican like Perry or Christie will get elected next year (at least the recession won’t be totally wasted) and things will change for the better. Just like Reagan replacing Carter. The players have changed but the policy divergences have not.

    In the meantime, the market will likely go down another 15-20% — that is on the premise of a recessionary bear market taking hold. And it could be worse if Europe falls apart. We are on the precipice right now; the situation is very fragile as it pertains to a Greek default in the near-term. The reality is that Germany holds the key to so much and here we have all the North American focus on the Dow and S&P 500 and yet the German DAX index has not recovered from early August lows —making new lows — as are the banks, which are down 50% this year. German investors know Europe better than U.S. investors; the latter still think we are going to
    miraculously muddle through. Things will be fine in Europe and U.S. stocks are cheap — especially the banks!

    But what is happening in the past two or three days is that the North American markets are succumbing to the events in the euro area — more so than by developments in the United States. The vagaries of globalization: 20-years ago, world equity markets had a 40% correlation with each other. Today that correlation is north of 80% (as we found out in 2008 when there was nowhere to hide and decoupling was confused for lags).

  21. Tim

    I am glad that my humble post has caused you read God’s Word. This is a good thing. And, no, I would never joke about a Bible verse because I don’t want to go to Hell.

    For tomorrow’s reading would you like me to quote where it says the Egyptians have dicks the size of horses and that they cum like a donkey? It’s in the book of 2 Kings, should you want to be proactive.

  22. Re: Administrator’s comment, “The insanity of (carrying out some program Administrator doesn’t like) is lost on the government drones.”

    As a former government worker, I can tell you that neither I nor my colleagues were drones. We have been workers all day and every day, just like you in the private sector. As for insane execution of directives, remember that we in government aren’t any different than you private employees who built the Edsel and Betamax and labored for Enron. We, like you, unthinkingly have done our best for our bosses. We have been good followers and loyal, just like you.

    Sure being good soldiers, mindless followers, and slavish subordinates may lead to some government and private mistakes. But isn’t that only the result of our way, the American way? We’re a highly regimented people; we’re loyal to our leaders and bosses; we do what we’re told. We’re not good little Nazis, as some critics complain, but we are loyal, obedient, and dutiful Americans just as we’ve been taught to be. As I wrote recently, the current way is the best way and the only way. Don’t fuck it up and, like Administrator and his arch hero, Ron Paul, start thinking and acting for yourself, your family, and country at this late date.

  23. Stucky says: I am glad that my humble post has caused you read God’s Word. This is a good thing. And, no, I would never joke about a Bible verse because I don’t want to go to Hell.

    “Religion has convinced people that there’s an invisible man…living in the sky, who watches everything you do every minute of every day. And the invisible man has a list of ten specific things he doesn’t want you to do. And if you do any of these things, he will send you to a special place, of burning and fire and smoke and torture and anguish for you to live forever, and suffer and burn and scream until the end of time. But he loves you. He loves you and he needs money.” – George Carlin

  24. @ Stuck – Wow! Dicks the size of horses and cum like donkeys? The things they DIDN’T teach me in Sunday School.

    I’ll have to look that one up, as tomorrow morning is my weekly Bible Study with my pastor and some compadres. THAT should provide for some lively discussion.

    “How To Be More Like The Ancient Egyptians”
    A Sermon By Tim

  25. Ahhhh, Stuck: You really threw me off with that whole 2 Kings reference. Thankfully, thanks to the Power of Google and Bible Gateway, I didn’t have to read the WHOLE book of 2 Kings. A quick Google search reveals the verse to be located at Ezekiel 23:20.

    Still, on the whole, a noble verse, no matter where it’s located. I wonder what my pastor will think of that one?

  26. God bless you in your studies, Tim.

    Alas, I have led you astray as I was going from memory — not safe to do at my age. The reference is Ezekial 23:20, not Kings. It doesn’t actually say “dicks” and “cum”. The Bible translators are much to genteel for that. But it IS what is meant! Also I mixed up the dicks and cum … it’s the other way around. I do apologize but please understand I was pleasuring myself when I was writing about it.

    To save you time from looking it up, the first is from the King Jimmy Version and the second from the New International Version. Study for understanding!

    KJV — “For she doted upon their paramours, whose flesh is as the flesh of asses, and whose issue is like the issue of horses.”

    NIV — “There she lusted after her lovers, whose genitals were like those of donkeys and whose emission was like that of horses”

  27. Now .. if I were to translate it;

    “The bitch lusted after her gigolos. who had huge horse cocks and whose cum was more than Smokey’s.”

  28. As far as Social Security goes, the argument is doomed because no one can agree on what the fuck it actually is. It’s no wonder, because the rules of the game have changed throughout the decades, but it comes down to one of two things:

    1) A savings/retirement account. This would account for all the people saying they want back what they paid in. How can anyone with two brain cells to rub together expect to get back what they paid in, when we’ve watched DECADES of old people (including my own grandparents) get back many multiple times what they paid in? A savings account doesn’t work that way! And what about the people who are getting money out of it but never paid anything into it? Which brings us to:

    2) A welfare/insurance program. In this case, you don’t expect to get back what you paid in. In fact, you hope you don’t ever become destitute enough to need it. (I’ve been paying car and homeowners insurance for years and hope I never have to file a claim.) But we’ve been paying so much! Well yes, that’s what it costs to take care of poor people, because we have a lot of poor people. Be glad you’re not one of them! Yet anyone with two brain cells to rub together wouldn’t reach this conclusion either, because then how do you explain the benefits paid to wealthy seniors who have plenty of their own money, and use their SS benefits to buy a Wnnebago?

    My conclusion is that it is neither option 1 nor 2. It is a vote-buying Ponzi scheme. I don’t like it, but I choose to give my blood pressure a break by not dwelling on it. In pragmatic Gen-X fashion, I simply work toward not relying on it, through not having kids (cutting expenses), not having debts (cutting expenses), and not planning on ever fully retiring (extending income). I’ll be spending my extra money on math and science classes for the next few years. Might as well get something useful out of my money, before it becomes worthless.

    In the end, it doesn’t matter (to anyone else) what I do. The Social Security system will collapse eventually, just like all the other government Free Shit programs, and that’s going to happen whether you or I are happy about it or not, and whether you or I depend on the program or not.

  29. I know it is politically attractive to denigrate Social Security now, but when you get down to it there is not much difference between SS and life insurance, car insurance, homeowners insurance etc.. Any claimant will extract many times more money out of the system (policy ) than was paid in by them. When my life insurance gets paid to a survivor, only a portion of what was paid out was paid in by me. Same for homeowners or car.
    The major problem with SS is the politicians who have stolen from the SS trust over the years and the alteration of the original intent of SS from covering old age and survivors to include disabled people. It was never intended for disabled people. That is expensive. Obama is making the fiscal situation much more dire by defunding the SS trust on the front side with his payroll tax cuts. That is just plain dumb, but the bankers who own him love it.

  30. Stilgar, the distinction has never been publicly made, about whether it is a retirement/savings plan, based on what you’ve paid in, or whether it’s a welfare/insurance plan for the very elderly and destitute, based on other people’s need.

    So everyone is free to expect different things, based (conveniently) on what their personal circumstances are, and this makes it easy for politicians to pander, to say, ‘You can get back what you paid in, and we can do this without borrowing more money, and we can preserve the program to take care of the needy and destitute!”

    The truth is, the program can’t do all of that. It can’t pay everyone back AND take care of the needy and destitute. Did you see the poverty statistics posted earlier? But people will continue on, voting for whoever makes them feel better about themselves, and about their own futures (see Ron Paul’s commentary on the causes of 9-11), because that is what people do.

    Right now, people think they can wish money out of the sky. They will vote for whoever perpetuates this myth. Current, regular commenters of TPB are exempted from this generalization, of course – congratulations, you motherfuckers – but this is what most people do, even those who drag themselves off the couch long enough to vote.

    The currency devaluation option still seems to me like the one that is most likely to happen. I think my money can best be invested in math and science classes, and even if I am wrong it will still be fun and make my brain grow. Fuck the rest of these assholes.

    1. Is Social Security a Ponzi Scheme? – I think so
      Bruce Krasting

      Rick Perry teed this up. I’m amazed at how much traction this has gotten. Clearly both sides of this issue are stirring the pot.

      I’ve looked up a few definitions of what a Ponzi scheme is. This one is from an excellent source. The Securities and Exchange Commission defines a Ponzi as:

      A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.
      Does Social Security constitute a Ponzi based on that definition? I think it does.

      There are two ways to look at this:

      I) If there are no changes in the current laws regarding Social Security does the projected future financial results support the conclusion that it is a Ponzi?

      II) If changes are made to Social Security will the consequence of those changes result in the conclusion that it is still a Ponzi?

      (I) is easy to answer. Based on the SEC definition, Social Security is a Ponzi. If you want proof of that go to the Social Security Trust Fund May 2011 report to Congress. On page 10 (of the report) you find the following chart. Somewhere around 2036 (I think much sooner) SS benefits will be cut by 25%. That is the law as it is written today.

      Conclusion: Anyone under 45 today is paying for something that they should expect to get 75 cent on the dollar. Clearly a Ponzi.

      Click here to enlarge

      To answer (II) requires that one make some assumptions regarding what changes to SS are coming. I rely on the recommendations from a variety of sources. Both Republicans and Democrats (including the President) have supported the recommendations made by the Fiscal Commission report. SS has it’s own set of recommendations. “Independent” private groups have made their thoughts public. While it is not clear what (if any) changes are coming at SS, the following covers the options that are being given serious consideration:

      Gradually raise the age limit to 70.
      Gradually increase FICA taxes.
      Change the formula that indexes SS benefits to inflation. The consequence would be to slow the current projected growth rate of SS payouts.
      Gradually increase the cap on incomes subject to FICA. (Currently $106,500).
      Of all of these options the one that has had the most support is to gradually increase the age limit to 70. What does that do for SS on the charge that it is a Ponzi?

      Assume I am 65 and getting $2,000 a month from SS. On paper I should die at age 77. By the numbers I will get 12 years of benefits.

      Now assume that the age limit is extended to 70. Assume further that this will be effective is 15 years. Based on what we know today the average life expectancy of a 65 year old male will be 13 years in 2026.

      This means that a person who reaches age 65 in 2026 will not get benefits for another 5 years (70). That same person will die at age 78. They will get benefits for only 8 years while I get mine for 12. I will get benefits for 50% longer than they do.

      Conclusion: Anyone who is under 50 today is getting screwed when that age limit goes up. For those folks, SS meets the definition of a Ponzi.

      Raising FICA makes things worse. Not only would younger workers pay more into the system as a % of their income, they will get benefits for a shorter period of time.They pay more for less when taxes are raised

      Conclusion: Increasing FICA taxes is a solution that forces the conclusion that a Ponzi is afoot.

      Changing the COLA formula has lots of support from the “deep thinkers”. I agree that if this were done it would have a very significant consequence to SS over a 30-40 year period.

      The desired effect is to reduce the inflation adjusted cost of benefits. I get $2,000 a month. We know what that buys today. In 30 years a retiree will get $4,000 a month, but because of the changes to COLA that $4,000 will have a purchasing power equal to only $1,000 today. This is the objective of the proposed changes.

      Conclusion: Changing the COLA formula devalues future benefits versus those receiving them today. Anyone under 40 is going to feel the full brunt of this. For them, SS is a Ponzi.

      Increasing the wage cap is just another way of increasing the current tax burden on workers. Yes, this increase will be targeted to those who make a decent buck, so this is a popular approach. The consequences will be felt by about 10% of all workers.

      Conclusion: For those in this group the consequences of #’s 1,2 and 3 are just magnified. I don’t feel sorry for those high-income earners but it’s certain that this group is facing the biggest Ponzi of them all.

      SS is, and always will be, an inter-generational transfer of wealth. By itself that does not have to mean it is a Ponzi. If the total population were symmetrical across all age groups the inter-generational impact would be both fair and reasonable. But that is not what we have in America today. We have a stable population that is rapidly aging. Given that dynamic anyone who is under 55 (and especially those who aspire for a high lifetime income) are going to get hit with the biggest inter-generational wealth transfer in history. For all in that group, SS is a Ponzi. They will pay in more than they get back. The extent that each age group is impacted varies. Those who are not yet born are the ones who will feel this the most.

      I’m not sure if Rick Perry is crazy or just crazy smart. There are 50 odd million Americans who are getting SS checks. That’s a hell of a lot of voters. That’s why SS is called the third rail.

      But if Perry asked himself, “How do I win this election?” He could well answer with a strategy that relied on young people who would cheer/support him. He could also look to all those swing voters under 55 who pay a fortune in SS and will not get their fair share back. It’s an odd political alliance. But it just might work. Mr. Romney seems to be doing well with the seniors. But he falls flat when he gets to a campus. The base that Perry is chasing after is the same one that got Obama elected.


      In my definition of a Ponzi there has to be intent to defraud. I’m not sure that this condition has been met. Every year for the past five the SS Trust Fund has told Congress that significant changes must be immediately implemented. SSA has not mislead anyone, so no fraud from them. The deciders who looked at these reports and chose to ignore what has been written are probably not guilty of fraud either. But they sure were remiss in their responsibilities.

  31. I’ve been meaning to share some presidential statements on SS throughout the years… it’s fascinating to see how the program was perceived throughout the years, and how it’s transitioned to the nightmare it is today. From the SSA history site.

    Franklin Delano Roosevelt

    “This law represents a cornerstone in a structure which is being built but is by no means completed–a structure intended to lessen the force of possible future depressions, to act as a protection to future administrations of the Government against the necessity of going deeply into debt to furnish relief to the needy–a law to flatten out the peaks and valleys of deflation and of inflation–in other words, a law that will take care of human needs and at the same time provide for the United States an economic structure of vastly greater soundness.” -August 14, 1935

    Harry S. Truman

    “It has long been recognized as an inescapable obligation of a democratic society to provide for every individual some measure of basic protection from hardship and want caused by factors beyond his control. In our own country, the obligation of the Federal Government in this respect has been recognized by the establishment of our Social Security system. . . . The passage of the Social Security Act in 1935 marked a great advance in our concept of the means by which our citizens, through their Government, can provide against common economic risks. . .” -May 24, 1948

    Dwight David Eisenhower

    “The system is not intended as a substitute for private savings, pension plans, and insurance protection. It is, rather, intended as the foundation upon which these other forms of protection can be soundly built. Thus, the individual’s own work, his planning and his thrift will bring him a higher standard of living upon his retirement, or his family a higher standard of living in the event of his death, than would otherwise be the case. Hence the system both encourages thrift and self-reliance, and helps to prevent destitution in our national life.” -January 14, 1954

    John Fitzgerald Kennedy

    “It is with great satisfaction that I have signed into law the Social Security Amendments of 1961. They represent an additional step toward eliminating many of the hardships resulting from old-age, disability, or the death of the family wage earner. . . . A Nation’s strength lies in the well being of its people. The social security program plays an important part in providing for families, children, and older persons in time of stress, but it cannot remain static. Changes in our population, in our working habits, and in our standard of living require constant revision.” -June 30, 1961

    Lyndon Baines Johnson

    “Thirty years ago, the American people made a basic decision that the later years of life should not be years of despondency and drift. The result was enactment of our Social Security program. . . . Since World War II, there has been increasing awareness of the fact that the full value of Social Security would not be realized unless provision were made to deal with the problem of costs of illnesses among our older citizens. . . . Compassion and reason dictate that this logical extension of our proven Social Security system will supply the prudent, feasible, and dignified way to free the aged from the fear of financial hardship in the event of illness.”
    -January 7, 1965

    Richard Milhous Nixon

    “This Nation must not break faith with those Americans who have a right to expect that Social Security payments will protect them and their families. . . . In the 34 years since the Social Security program was first established, it has become a central part of life for a growing number of Americans. . . . Almost all Americans have a stake in the soundness of the Social Security system.” -September 25, 1969

    Gerald Rudolph Ford

    “The fortieth anniversary of the Social Security Act celebrates an important milestone in responsible public service. I continue to be impressed by the steady responsiveness of the Social Security program to the changing needs of our people. . . . I warmly commend the employees of the Social Security Administration whose efforts are such a positive influence on the lives of countless fellow citizens.” -August 9, 1975

    Jimmy Carter

    “The Social Security program is a pact between workers and their employers that they will contribute to a common fund to ensure that those who are no longer part of the work force will have a basic income on which to live. It represents our commitment as a society to the belief that workers should not live in dread that a disability, death, or old age could leave them or their families destitute.” – December 20, 1977

    Ronald Wilson Reagan

    “The changes in this legislation will allow Social Security to age as gracefully as all of us hope to do ourselves, without becoming an overwhelming burden on generations still to come. . . . Our elderly need no longer fear that the checks they depend on will be stopped or reduced. These amendments protect them. Americans of middle age need no longer worry whether their career-long investment will pay off. These amendments guarantee it. And younger people can feel confident that Social Security will still be around when they need it to cushion their retirement.” – April 20, 1982

    George H. W. Bush

    “And there’s one thing I hope we will all be able to agree on. It’s about our commitments. I’m talking about Social Security. To every American out there on Social Security, to every American supporting that system today, and to everyone counting on it when they retire, we made a promise to you, and we are going to keep it.” – January 31, 1990

    William Jefferson Clinton

    “Today, I want to talk about Social Security and how all of us can ensure that one of the greatest achievements of this century continues to serve our people well into the next. . . . For 60 years, Social Security has meant more than an ID number on a tax form; more than a monthly check in the mail. It reflects our deepest values — our respect for our parents and our belief that all Americans deserve to retire with dignity.” — March 21, 1998

  32. The “Obama Jobs Plan” is about creating more government jobs. Government can only create government jobs. Any politician that tells you otherwise is lying. Obama is also about Unions. Infrastructure construction jobs will be done by union workers under government contracts.

    We all can figure it all out – the trend in government is for total control of the economy. Regulations create that control. The problem with that is people with a business bent and are the job creators don’t like working under government control. The answer for job growth is to reduce the government regulations; thus reducing government control. But the fact is government is not reducing the regulations because that means government gives up power over the people by doing that. So the trend will continue until we have total government control, zero unemployment, and no production. I can already see it: the local donut shop I go to is now run by the government and you can only get one kind of donut; the kind I don’t like. Then the time will come when I can only get donuts one day a week because of shortages in flour to make the donuts. Because of production problems with the government run wheat farms. This is the road we are going down. This is where our politicians are taking us. No politician can tell us they can create other than government jobs. Payroll tax breaks will not create something that isn’t there. See how these people lie?

    Another issue that needs clarity is social security and replacement jobs. It makes sense to me that for each retiring person that goes on social security there is one job creation for a younger person to take this retiree’s place. I have heard a statement saying there will be 10,000 baby boomers per day retiring in the near future. If this is true then one can also infer that there will be 10,000 people per day coming into the the workforce to replace these people leaving.

    The worst thing being done right now is reducing payroll taxes being collected for social security. I mean it should be self evident that in such a dire situation with a sagging economy that the last thing we would need is reduced social security payments out of the checks of those still working.

    Social security is a promise made and maintained by all the politicians. Much money has been taken out of the system to pay for wars and other government programs & abuses. IOUs need to be repaid. I would suggest if money is short for all the payouts needed that we take the retirement money all the retired politicans are getting and use that to pay for social security. I would say we take their real estate and bank accounts too. LOL

  33. The reason government cannot create private sector jobs effectively is because the premise is not there to service the customer. Government is about enforcement; not service. Example: What service does the TSA provide? Security? If the TSA was a private security force that depended upon service rather than enforcement then it would have to create an atmosphere of security rather than harrassment. The large corporations are also no longer about service to the customer. Trying calling them about a product they sold you that you are unsatisfied with. You get to talk to a computer program that takes you on a wild goose chase. It is only a matter of time before these large corporations will experience their day of lost customers. But since these corporations are monopolies right now we have to put up with them. But their day is coming when their lack of service will cost them.

    You don’t miss the water until the well runs dry. The well is running dry for the private sector. The politicians don’t have the solutions. They are lying to us. They have to lie to us because they are part of the problem.

  34. From the upcoming issue of TIME:

    But you know there’s concern that you use controversial rhetoric, like calling Social Security a “Ponzi scheme.”

    “There may be someone who is an established Republican who circulates in the cocktail circuit that would find some of my rhetoric to be inflammatory or what have you, but I’m really talking to the American citizen out there. I think American citizens are just tired of this political correctness and politicians who are tiptoeing around important issues. They want a decisive leader. I’m comfortable that the rhetoric I have used was both descriptive and spot on. Calling Social Security a Ponzi scheme has been used for years. I don’t think people should be surprised that terminology would be used.

    “No one gets confused about the point I was making, that we have a system that is now broken. We need to make sure that those on Social Security today — and those approaching it — know without a doubt it will be in place. It will not go away. We’ll have a transitional period for those in mid-career as they’re planning for their retirement. And our young people should be given some options. I don’t know what all of those options need to be yet, but they know instinctively that the program that is there today is not going to be there for them unless there are changes made.

    “I don’t get particularly concerned that I need to back off from my factual statement that Social Security, as it is structured today, is broken. If you want to call it a Ponzi scheme, if you want to say it’s a criminal enterprise, if you just want to say it’s broken –they all get to the same point. We need, as a country, to have an adult conversation. Don’t try to scare the senior citizens and those who are on Social Security that it’s somehow going to go away with the mean, old heartless Republican.”


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