Insurance and Social Security V

    We have some valuable comments from Anonymous 3 on Social Security.
    He has answered my question on whether I should accept Social Security payments or not accept them, because I do not accept charity or welfare. He says that he accepts the monthly payment from the Treasury and gives it to charitable institutions of his choice. He says I am quite correct. Social Security is neither welfare nor charity. However, if it is not needed income, I might consider giving it to my favorite charity.  That is an honorable use of the payment and likely would do some good.
    He also says It appears clear that Anonymous 2 is further to the right than he is.
    Finally, Anonymous 3 has sent two separate messages with other comments on Social Security. They are as follows:

 

Message 1:
Let's agree on several facts:

    1.  FICA is a tax. The receipts flow into general revenue and are spent by the Congress.

    2.  The Social Security "Trust Fund" is an artifact of the federal accounting system.  As the FICA taxes arrive, federal bonds are issued and go into this account.  This is simply transferring money from one line item to another.

    3.  When Social Security was legislated, it was based entirely on the concept that those employed would pay a tax to provide money to be paid to those who had retired. (Sounds a bit like Bernie Madoff).  However, there was no allowance for the increasing longevity of retirees.  As a result, adjustments in the FICA tax rate were made from time to time.

    4.  The number of retirees has increased while the number of employees has diminished.  The FICA tax revenues are less than the benefits being paid and have been to some years. As a result the bonds plus accrued interest in the Social Security account of being redeemed.

    5.  Without any changes, in less than a decade the bonds and accrued interest in the Social Security account will be exhausted, and transfers from the general account will be needed to pay the benefits.

    Your statement that your Social Security check is a contracted obligation of the federal government is simply not true. It is really an amount set by legislated policy and has very little to do with what you paid in FICA taxes.

Message 2:

    Another issue facing Social Security is the number of fraudulent disability claims.  By the numbers, a substantial percentage of people under 65 are disabled. This is a smaller draw on the fund but means that major reforms are needed to preserve the program.