Abolish social security
Posted by technocraticnihilist@reddit | Libertarian | View on Reddit | 97 comments
Posted by technocraticnihilist@reddit | Libertarian | View on Reddit | 97 comments
JonnyDoeDoe@reddit
Is a Ponza Scheme that if you or I ran it would go to jail, theft?
Certainly fraud...
noonsumwhere@reddit
It's quite similar to a ponzy scheme. And FDR was a socialist racist.
mcflymikes@reddit
I wouldn"t call it a ponzy scheme, that would imply that is a scam and "voluntary" for the taxpayer to fall into the scam.
Its more like an extortion that is "sold" as "savings" and "security" for when you are old.
The people who invented this did great marketing jobs to sell this system and showing how generous it was. "See this old lady, she only contributed for five years and now the state is going to give her a 20 years pension".
That was possible to do in 1880 when the amount of people older than 65 was like 5%. The intend of this system was just to add another tax (to finance wars mainly) but with better marketing, but they never really care about long term consequences.
bb0110@reddit
He said similar to a ponzi scheme, not that it is one. He is right though, the structure is that of a ponzi scheme. You pay in and that money is used to pay the people that need it now, you aren’t actually “saving” for yourself or even the future. The reason most ponzi schemes fail and this one hasn’t yet is because you have no opportunity to try to take your money out that you out in, because it isn’t actually yours.
noonsumwhere@reddit
Man I bet I would've sounded smarter if I spelled ponzi correctly LMAO
noonsumwhere@reddit
The only reason this one hasn't failed IMO is because they keep printing money to fund SS and the rest of the administrative state.
natermer@reddit
The big scam for social security is that they use financial terms like "invest" and "return" to make it look like it is a retirement program.
It isn't. It is a payroll tax that is used for welfare program for people right now. For you to use social security in the future it depends on young people paying into it for your retirement.
And what makes it worse as a payroll tax is that 50% of what you pay into it is taken out prior to your paycheck in the form of "employer contributions".
That is what makes social security especially suck. The deception and lies about it makes it worse.
CodeBlue_04@reddit
As much as I think of Social Security as a Ponzi scheme, I'm also capable of doing math. The math on this is atrocious.
$600k in 67 years means that they would have contributed the current annual max of a little over $10k (requiring $168k of W2 income to reach) for almost 60 years. How many of us were making $168k at 10?
Additionally, that amount has regularly increased over those 67 years. In 1980, for example, the max taxable income was $25,900. 6.2% of that is $1,605.80.
It's impossible to have paid that much into Social Security, even if you'd paid the annual maximum since 1937.
If they can't do that math, then I very much doubt the accuracy of the other numbers.
Inevitable-Plantain5@reddit
Good points but does that mean we need to assume they will increase payments proportionally when we begin collecting benefits? If so I worry because with wages stagnating compared to inflation the amount we would need social secuirty to increase would be crippling I imagine. The system is already on the brink and with population growth slowing/declining I dont think we can afford to increase social security taxes to the rate we would need for the boomers retiring right now let alone increasing benefit payments for future generations
Conscious_Hunt9439@reddit
This was posted a while ago in a decidedly non-libertarian sub and I did do the math (and got roundly downvoted in that echo chamber). The issue is thinking of this as if he retired today, but the originally quote is from a guy in his mid fourties’ who still has more than two decades to work and pay in.
What I posted there was:
“I’m just a couple of years older than him and looking at my own SS statement his math seems fairly accurate.
I f’ed around for a number of years out of high school in lowish wage jobs and really didn’t start maxing out SS contributions until about ten years ago, I also had a couple lean years when I started my company at the same time COVID hit, but between myself and employers around $192,500 has been paid into SS for me through last year.
If I paid in the max for the next 20 years until I turn 67 (assuming the max stays at $168,600 and doesn’t increase by 87% like it has over the last 20 years) a little over $610,000 will have been paid into SS by or for me.
For ease of growth calculation I plugged these numbers into a retirement calculator from the AARP, and if I had earned 0% interest to date and was left earning a rate of 5% from today on, that $610k plus growth would end up being a little over $1.2M when I retired. At 5% interest that $1.2M would generate $60,000 a year or not quite 40% more than the $37,000 SS promises to pay (if it is still solvent).
Of course there is almost zero chance that the money contributed to date would have returned a 0% return, so if I look at my IRA which I did not start contributing to until my thirties and have never, even with employer match when I had it, contributed more than 12.4% of my salary to, it likely gives a decent picture of what the bare minimum that $192500 plus earned interest would be if it were earning similarly. As of today my IRA balance is a bit over $600k, and if we replace the $192,500 number in AARP’s calculator with that number it indicates that $600k plus max SS contribution for the next 20 years growing at a reasonable 5% rate I would have just over $2.3M at retirement. At 6% interest that $2.3M would generate $115,000 a year in interest without touching the principal.”

MangoAtrocity@reddit
And, in this economy, that 6% is super conservative. I’m up 42% YTD.
kkdawg22@reddit
Exactly! 5% is so modest. My Robinhood is up 83% and my IRAs are up 55%. Social security is theft.
MangoAtrocity@reddit
The $TQQQ train can’t be stopped!
TigerRaiders@reddit
My dad died penniless and social security was his only means of not becoming homeless and moving in with us
CodeBlue_04@reddit
My parents will eventually have to move in with me for the same reason.
TigerRaiders@reddit
I think we’re gonna see a lot more homeless older people in the next decade given birth rates too.
CodeBlue_04@reddit
I agree. I hope we're wrong, but it seems kinda unlikely. Especially since the Gen Z kids are even more screwed than I was as a millennial.
civ5ftw@reddit
Its sad that this is farther down than it should be. Plenty of conversation to be had on the inefficiencies of the system and social safety nets, but the math on this definitely doesn't work. Also payouts are based on a workers average earnings so there's no way someone is maxing out social security tax and also only getting 3k/mo.
Jarte3@reddit
It’s the top comment now thankfully
thehoodedidiot@reddit
Employer contributions?
thethrowupcat@reddit
The problem is we have become a society so dependent and expecting SS that we blow off saving.
We need to support saving culture and make saving exciting. Delaying gratification is not in our playbook, and therefore people blow through what they earn and subsequently cannot be trusted to save for their own future.
An entire society in debt to luxury things they cannot afford and with no way to survive panics the government. That’s why they’ll just print more money to throw it into this awful system and the responsible folks have to forcefully pay into.
kkdawg22@reddit
If someone banks on SS for retirement, they deserve to be broke...
Ehronatha@reddit
Don't forget that the Federal Reserve has the stated goal of devaluing your money by at least 2% every year. Additionally, interest on cash accounts is taxed at the full rate (with maybe some exceptions), while gains from speculative investments (stocks) are taxed at a lower rate (for most people).
I love saving, too, but the system is set up to push people into speculative investments and to punish cash savings.
thethrowupcat@reddit
Yes that’s absolutely right. Unless they make the currency valuable people will not save. So it doesn’t really matter what they’re saving into — saving is the core issue.
Ehronatha@reddit
It currently is a better savings option because it is propped up by the government, as well. The people managing our economy are always concerned about the health of the stock market, and ensuring constant inflation is one way they do that - it forces us small fish into the stock market for the benefit of the big fish. You're assuming (probably correctly) that this policy will continue indefinitely, but it might not
thethrowupcat@reddit
Well assuming the US government collapsed as a worse case scenario, one could assume that companies still would be viable. For example, even though Mercedes made vehicles for the Nazis, and the Nazi government fell, the companies from that time continued on.
ekshredburger@reddit
Hi everyone,
I agree that Social Security feels like theft, and I wish it didn’t exist.
That said, millions of Americans depend on it to survive. How do we address this? What solutions could we propose for those who rely on it?
I’d love to hear your thoughts, especially since this is a common objection I encounter in discussions, and I want to be better prepared to respond.
pdx2las@reddit
Maybe literally make it a savings account that buys T bills and other safe investments that citizens can tap when they reach 65?
ekshredburger@reddit
But what about the people that currently depend on social security to live?
mnailz1@reddit
It is
1fine69@reddit
They also tax your social security checks!
PissOnUserNames@reddit
I never understood why government employees like military pay income tax. That income they receive is just relocated tax money. Just seems like extra bureaucratic paperwork. Just pay them less of our tax money and skip the tax part. Yeah I get single vs married vs dependents means different taxable levels but thats dumb in itself
FreeDarkChocolate@reddit
Taking the progressive incone tax system as a given for the sake of the discussion: In addition to what you said, it's because they can have other sources of income that ultimately all need to be added together, and because other levels of government need to know the gross income amount as well for their own purposes. It'd also create a separate sitiation for managing tax credits and deductions.
HatredInfinite@reddit
The bureaucracy is the point. Bureaucratic bullshit means more jobs to perform the bureaucratic bullshit and the government loves to "create jobs" with other people's money.
pm_me_psn@reddit
Dependent tax credits are dumb?
PissOnUserNames@reddit
For income tax yes.
If they want to throw a little back at the end of the year for taxes paid on expenses for that dependent ok. Income tax for one shouldn't be a thing but since it is, everyone should pay the same flat rate regardless of income level or marriage status or dependents
Wacktool@reddit
This has always blown my mind
starlord97@reddit
It's getting way worse than what our forefathers had to endure. I'm being taxed to hell and not represented at all in my government.
Wacktool@reddit
If they are going to FORCE us to pay into it then it should be a retirement target age account that is locked and cant be touched by no1 but the retiree.
dhcernese@reddit
Thank you Reagan
18hockey@reddit
no they don't...?
wifichick@reddit
When it was created it was a safety net for the poor during a very hard financial time (after the depression). It was done to help take care of people when we had to care about our neighbors …… and not so much focus on “individual over group”.
BannedAgain-573@reddit
Of course if you privately and responsibility invest your return would be greater. SS Is only supposed to keep the lowest more irresponsible and poor from being completely destitute.
Tripl3b3am@reddit
There was a formal study from the Tax Foundation here. If a worker with median income had made conservative investments instead of putting it into Social Security, they'd have $60k in annual retirement income vs. $20k with Social Security. The difference in quality of life is staggering.
CasualEcon@reddit
If the SS admin had put some of the money into equities, instead of government bonds, we'd be in much better shape. New Zealand and Canada do this and their long term average returns, even through the 2008 crisis, are about double what we get from bonds.
Megatoasty@reddit
The problem isn’t that they didn’t invest properly it’s that the government borrows against social security. This should be flat out illegal. #bringbacktarandfeathering
LogicalConstant@reddit
They don't invest it at all. Every penny of social security tax that has ever been collected was immediately spent.
CasualEcon@reddit
They invested some in bonds as they built up the trust fund. Not sure when they stopped, but they definitely have. Which is a good point. My post was perhaps not clear enough
LogicalConstant@reddit
They invested nothing. Investment implies that they put resources to productive use in the hopes of getting a return on that investment.
Imagine you inherited $100,000 today. Let's say you paid off $20,000 of credit card debt and went out and bought an $80,000 car. Your bank account is now empty again. Then you write yourself a note saying "I owe myself $100,000 so I will go to work for the next 2 years to earn $110,000 to cover the money that I just spent plus interest and put it back in the bank." Would you say that you "invested" $100,000? Obviously not.
This is basically what happens with social security taxes. It ignores the fact that taxes were going to be collected in the future anyway. All it did was allocate future taxes to paying back social security. That's it. It's a sham.
natermer@reddit
They won't do that because social security is a "slush fund" for government spending.
They defend this activity because through bonds social security gets a % return on the money they take to fund other programs. So, apparently, they want you to believe they are doing you this huge favor by taxing you and claiming that it is a "investment".
CasualEcon@reddit
I've heard this claim a lot, but have never seen anything that backs it up. From what I have seen, SS currently pays out more than it collects in taxes. The gap between taxes and payout is covered by a trust fund that was built up in the 70's and 80's. That fund will be depleted in about 10 years and at that point, SS will only pay out 70% of what it has promised.
InTheSharkTank@reddit
Not to mention "buying bonds" just hands the money over as general revenue for the US government. It's not invested at all, it's just a tax and the trust funds are empty
shodan13@reddit
What is.. 401k?
LogicalConstant@reddit
Try not paying social security tax and putting the money into your 401k instead. See how that goes.
shodan13@reddit
I know you're allergic to solidarity, but both exist for reasons.
LogicalConstant@reddit
Social security exists because the government wanted more tax revenue. 401ks exist because companies didn't want to offer pensions anymore.
shodan13@reddit
Social security exists because having a lot of destitute people is bad for your country.
LogicalConstant@reddit
No. That's just what they told everybody. Congress doesn't give a shit about you or me or anybody else.
shodan13@reddit
Sorry, I was talking about the German Empire.
Conscious_Hunt9439@reddit
A 401k is a tax advantaged individual retirement account under US law. Money invested in a 401k account is not subject to US federal income taxes until it is withdrawn after retirement, so by placing money in a 401k account a person can reduce their tax burden in the year the money is earned, let it grow as an investment in the stock market for a number of years, then withdraw it after retirement when the rate it will be taxed at is lower than it was when they earned it.
Fun-Arachnid200@reddit
Not to mention the money is already spent so the young broke generations are being robbed to pay for a majority of recipients who are "entitled" to the dole despite not needing it. Couldn't imagine a more ironic institution.
Chimp75@reddit
The math doesn’t add up. 50 years of $12,000 contributions. Would equal $600k. Can someone do the math? I’m already done trying to figure it out. SS is 6.2% employee contribution and employer is the same at this point. That being said, assume he’s an owner of a company for 50 years, started at 17 making the max every year. I doubt his contributions equal what he is saying. Going with the numbers stated, 12k per year for 50 years at 5% is $2.7M. In 1976 the max was $15,300 and the rate was 5.95 total which is $900. I just don’t see this as a helpful post.
tacocrewman111@reddit
Abolish all forms of taxed income. Your money is your responsibility. If they want to tax land on their soil sure, food, clothes, other essentials sure, but taxing you for working is not an incentive to work hard and make lots of money it's incentive to stay on food stamps and government programs. Why work hard when you just work and get little perks for not working enough. Tbh if that money was used to actually intrinsically improve the lives of the people being taxed I wouldn't be mad but they don't.
Thuban@reddit
And on top of it you have to pay taxes on money the government took from you, used & abused and gives you a prince back. Talk about a triple fucking.
CrueltySquadMODTempt@reddit
Taxation has always been and always will be theft from the people. If we want to support it we will pay good money for it, we want returns and we want to have value in those things. This is blatant theft.
FriendZone53@reddit
How would you phase it out in a responsible way? Doesn’t seem fair to delete for all the people who paid into it. I suppose govt could return all premiums with interest to the living and then shut it down. It would add a ton to the debt but maybe elon will actually fix that.
Libertad-para-todos@reddit
Social security is racist. Here’s why: Statistically, Blacks live shorter lives than whites buy pay into the system their entire working lives. I suspect blacks generally opt in to SS earlier in general which translates to lower payments. White people live longer and may wait longer to claim benefits (and thus bigger checks.) Yet it is liberals who chiefly oppose giving people the freedom to invest part of their social security contributions into private accounts, which could benefit blacks (and the people in the low income strata) the most.
Ragtime07@reddit
Well it is theft. There’s your answer. No start treating it as such and demanding more from our politicians
Normaali_Ihminen@reddit
Arguably it is now scam but in my grandparents youth it really wasn’t. Also I rather pay more taxes if it lessens social inequality. You dont want a society that has high disparity between have nots and have it all.
Ragtime07@reddit
I like the idea of my taxes helping others but they aren’t utilized that way. So no, I want every penny that I earn. And that includes social security.
Abby_Normal90@reddit
Abolish social security is easily one of the stupidest posts that keeps recurring on this sub. This is a wholly ignorant position spouted by trolls and fools alike.
Asangkt358@reddit
"People that don't agree with me are stupid!"
phonsely@reddit
its so grandma doesnt die in the street when she cant work anymore ffs. selfish ass people
LazyClerk408@reddit
Idk bro, people are too dumb already. I think tax is theft. But they are def dumb. They don’t plan ahead
tritonice@reddit
Hmmmmm. Social security pays for the current retirees, a big portion of those who qualify for disability, spouses who didn't work enough to earn their own benefit and others.
It's a social program where the working class pays for a large majority of the elderly's benefits (outside of healthcare, which is a whole other ball of wax).
It isn't YOUR personal retirement fund. Can it be managed a different way? Surely..... go vote for those who want to change it. Hasn't happened yet, and we are about to all go off the 2039 cliff together when it doesn't bring in enough to pay everyone.
Rockytriton@reddit
Abolish it and then what? What happens to the money I already paid in and what happens to those currently living on it?
squiddybro@reddit
your money is gone, just like all the other taxes you paid to the government.
jmd_forest@reddit
Aaaaaaaannnndddd ... it's gone!
A-Glocktopus@reddit
The obvious answer would be to send a check to each person for however much they’ve put into it so far, and call it a day. Unfortunately they don’t have that money and can’t do that. So without some big cut of our regular taxes, it’s ganna continue on until they’re totally out of money. Then they’ll try to fix it or something then, when it’s too late instead of working on solving the issue now.
Rockytriton@reddit
doesn't seem like such an obvious answer with the "unfortunately they don't have the money and can't do that."
I agree it sucks that I can't just invest the money I put into it myself, but the fact is that the vast majority of people don't know how to do this for themselves and you can't just let the vast majority of people starve when they are no longer able to work.
A-Glocktopus@reddit
Oh no I agree with you, but the “obvious” answer still stands. A refund is the common solution when ending a service that’s already been paid for by the consumer. But clearly that doesn’t work in this situation just based on them already running out of money lol. I think you’re taking my answer a bit too seriously as there’s simply no true perfect solution for the SS situation. Potentially some form of Re-vamp. Maybe people are right and Elon will look into this. Dudes probably smart enough to figure it out.
bodhiseppuku@reddit
Pyramid scheme with high overhead. But it's a safety net for so many. Inefficient, yes... Also better it still exists. Maybe the new DOGE can review and improve efficiency of social security. Maybe it will still be around when I retire, but I'm not planning on it
I've been putting away 20% into my 401k for a couple of years now. I'm hoping to enjoy my retirement, rather than counting on a minimal safety net. I see many older people around me who survive from Social Security dispersements. These people are not living low stress, enjoyable retirements.
Tripl3b3am@reddit
We could just give people the option of where these "safety net" contributions go - a private retirement plan or Social Security. The research shows the private option would result in three times the retirement income for the median worker. That would probably be the most impactful piece of legislation of our time.
CasualEcon@reddit
That would not work because your SS taxes are not set aside for you. They're paid out to current retirees. When the system was started there were 5 workers paying for every 1 retiree. The assumption was that the birth rate would remain steady and that worker to retiree ratio would stay constant. It didn't. The ratio is now 3 workers to every 1 retiree and in a few years it will be close to 2 workers for each retiree.
With 5 workers, each of them supports 20% of one retiree. With three workers they each support 33% of one retiree which is a burden that is 65% larger than before ((33-20)/20= .65)
jmd_forest@reddit
Yes ... government assumptions are often wrong and lead to the kind of theft currently being experienced by the US citizens. Despite your protestations to the contrary if the funds going into SS had gone into a private retirement plan to start with it would have worked not only just fine but much better than the current system.
dubie2003@reddit
Safety nets don’t work that way. They are a one size fits all type of thing used to ensure that the basics are provided by those who meet the bare minimum and even then it isn’t always enough for those who have not (for whatever reason) saved extra.
While it sucks for those who are financially stable and have the means to absorb the ups and downs of the market but it’s not designed for them, it’s designed for those minimum wage workers to ensure they have something monthly when they retire as they may not have been able to save too much extra and if they had the choice on investing, they could have made poor choices and ended up homeless.
k0unitX@reddit
One could counter-argue that welfare systems de-incentivize having children and created the birth rate crisis we have today
natermer@reddit
Pyramid schemes have such high overhead that they are inverted. That is they cost far more then what they produce. That is the nature of pyramid schemes. You end up paying 100% for a -80% return.
That is why social security isn't a retirement program. It is just a tax. Just like the sales tax or gas tax or whatever. It is a paycheck tax.
knapper91@reddit
The government should be required to pay back what we’ve paid in, with interest, after it’s abolished.
sock_fighter@reddit
It is REDISTRIBUTION. disagree about it if you'd like, but this pretend comparison is disingenuous. Just say, I don't want poor people to have guaranteed retirement income.
Grundelwald@reddit
People always talk about Social Security only in the context of a retirement scheme, but it's also disability insurance. To be accurate then you need to also factor in (at minimum) paying a disability insurance premium until you are 67 as well since that is also something you are paying for with your SSA taxes.
danmojo82@reddit
Time to make social security a government enforced IRA for each person with a minimum payout guaranteed for low income people.
schwabadelic@reddit
Plus I am not guaranteed to live until 67, so I might not see that money anyway. SS is the biggest scam.
icorrectotherpeople@reddit
Social security is a ponzi scheme
CorneliusEnterprises@reddit
👏 agreed. They hoard our labor and give us almost nothing I return. We are labored all our lives till we die. It is a system diminishing returns at best.
Pleasant_Start9544@reddit
It should be abolished.
futuristicplatapus@reddit
It’s meant for control. I remember my grandparents saying when it was passed in congress that it wasn’t working because no one wanted to oped into it because it made no sense. Then they force it. When government forces a citizen to do somethings, they don’t have your best interests in mind.