Social Security is not a fair deal, nor is it some sort of retirement savings account; it's a Ponzi scheme at best and a socialist program at worst that threatens to implode in exactly the same way that Bernie Madoff and the U.S.S.R., imploded. The problem with Social Security―as any actuary could easily explain―is that it is essentially an insurance program. However, it is a incredibly foolish one that gives exactly zero thought to actuarial tables and the accounting that keeps insurance companies from going bankrupt. Anyone who's ever purchased life-insurance is well aware that age, gender, race, lifestyle, as well as physical condition and family history all play a major role in setting the price of the insurance premium. None of these incredibly important considerations were ever considered when President Franklin Delano Roosevelt signed the Social Security Act of 1935 into law, nor were these crucial concerns of any concern to President Lyndon Baines Johnson when he signed into law the Social Security Amendments of 1965 which became known as Medicare and Medicaid.
When I purchase life insurance, I'm making a bet with an insurance company that I'll die young. If I do happen to die at a younger age than the insurance company wagers that I will, then I win a big payout. When Uncle Sam confiscates Social Security out of my paycheck, I'm forced to make the bet that I'll live a long time, while Uncle Sam is betting that I'll die young. Once I reach my retirement age I begin to collect Social Security, and continue collecting every month for as long as I live. At some point if I live long enough, I become the winner of the wager when I begin to collect more than I paid in. If I die before the break-even point then Uncle Sam wins and keeps all the money left-over. The major problem with this Ponzi scheme, is that the first investors―[some taxpayers began receiving benefits after paying Social Security for only a single month]―got all the money while those of us who came later are going to end up getting the shaft.
Additionally, not enough thought was given to advances in medical treatments that extend lives, nor was any sort of consideration given to the fact that some people are quite obviously not going to live as long as others. Why do men have to pay for their Social Security at the same rate as women, when we know that women live on average seven years longer? That difference of seven years―which will pay the average women as much as $100,000.00 more than the average man―should equate to substantially lower Social Security premiums for men than for women. Similar concerns for race are true. There is a five year shortfall in life expectancy for blacks; which translates to $75,000.00. Shouldn't black people have a lower Social Security Premium? What about smokers? What about people with a family history of congestive heart failure? Since proper odds-making―actuarial―data is ignored, many of us are being forced to make a sucker's bet.
A fair Social Security program would either be a true insurance program with all of the actuarial data built in and premiums set accordingly, or it would be a true retirement account with payments allotted over a set time period and once completely paid out, that would be that. Any funds remaining because of an earlier than expected death would be paid to family survivors as planned for within a will or similar instrument.
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