It may surprise many people to learn that Social Security benefits are not what they seem.
Many people believe that Social Security is an “earned right.” That is, they think that because they have paid Social Security taxes, they are entitled to receive Social Security benefits. The government encourages that belief by referring to Social Security taxes as “contributions,” as in the Federal Insurance Contribution Act…
…However, in the 1960 case of Fleming v. Nestor, the U.S. Supreme Court ruled that workers have no legally binding contractual rights to their Social Security benefits, and that those benefits can be cut or even eliminated at any time.
Whoops! Turns out that the whole enterprise is in fact a Ponzi scheme and the youth in this country are getting robbed.
In other words, Social Security is not an insurance program at all. It is simply a payroll tax on one side and a welfare program on the other. Your Social Security benefits are always subject to the whim of 535 politicians in Washington. Congress has cut Social Security benefits in the past and is likely to do so in the future…
It is characteristic of any Ponzi fraud that the people who get in on the ground floor do well. That makes the scheme popular; people clamor to get in. This is what has happened with Social Security and Medicare here in the U.S. Past and current beneficiaries are receiving benefits that are entirely disproportionate to what they paid in. This obviously cannot continue indefinitely. Every Ponzi fraud inevitably crashes when its exponential growth cannot be sustained because there is not enough new money–not enough suckers, to put it bluntly. In the context of entitlements, “new money” means young people. That point is now approaching rather rapidly.
As it is Obamacare (aka The Affordable Care Act) is turning out to be entirely unaffordable even in these early stages of implementation.
We can’t afford the government we have with the amount of taxes we’re collecting and no one wants to pay the taxes it would take to afford it. It isn’t that’s something’s gotta give. It’s that something’s gonna give. Whether it’s inflation, Treasury buyers revolting, or something else, borrowing 46 cents for every dollar you spend is going to end badly.