Wednesday, June 20, 2012

My Beef with Social (In)Security

Since we are in the midst of a hot political climate here in the states I figure I would add some M-80s to the mix with this take: The American Social Security system is an atrocious mess. The only positive about this failure of a program is that it’s the shining example that socialism doesn’t work.

During my entire working lifetime here in the states for every penny I earn I am taxed for the Social (In)Security system at a rate of 4.2%, my employer is also taxed on this but at a rate of 6.2%. If I were self-employed my rate would be 10%. But wait, there’s more! When I reach retirement age and begin to receive distributions from social (in)security and I earn an income of more than $25,000 in a year I get to get taxed on my social (in)security distribution. I am also not allowed to opt out of participating in the socialized program, unless of course I am Amish or a pastor.

There are generally 4 points of concern as to why a socialist program was created by the KGB US Government following the great depression.

1.      Without a mandated government retirement program, workers who voluntarily did not save for retirement had no income at the end of their working lifetime
2.      Without a mandated government program, workers who voluntarily did not purchase disability insurance had no source of income when becoming disabled
3.      For the real 1%, those with mental and physical disabilities who could never earn an income in their lifetimes, there was no safety net
4.      Without a mandated government health insurance program for the retirees, this meant at retirement retirees could no longer afford medical care

Born out of fear following the great depression, facing 25% unemployment (1 out of 4 people, really kgb us government, really??!!) through FDR’s “Raw New Deal,” this socialist program screams to Americans, “You are too stupid to save for your own retirement and it is the government’s responsibility to take care of you.”

I know I can rant and rave and make funny anecdotes and quips about how much I hate the KGB US Government, but I’ll leave it at this with a direct statement to the KGB US Government: It is not your responsibility to take care of me or my family. People are supposed to help people.

In the most extreme example I could think of, let’s say my parents acted like the KGB US Government: They spent more than they make and saved for nothing. Now let’s assume all things remain constant and I continue on my total money makeover and have attained financial peace. When both of my parents retire they have no assets, no ira, no 401k, no home to sell, no pension. In my ideal world it would be my responsibility to take my parents into my home, add them as dependants onto my insurance program and help make sure they live out their lives with dignity. It is neither my neighbor’s nor your responsibility to provide a safety net for my parents, that is my job as a member of their family.

But what about those that are permanently disabled and unable to work? Well, if the social security tax were eliminated, the 4.2% of my paycheck that comes out would then go into my pocket. On average the latest numbers from the Census Bureau note that the average American household income is $50,000. So if the money that was pissed away with Social (In)Security were instead invested in a good growth stock mutual fund that averaged 12%, one average household would have $2,000 every year to invest. Over a 35 year working lifetime, through the power of compound interest, this regular investment would amount to $1,082,567.01! And if just a few of us wild and crazy Dave Ramsey nuts banded together, JUST WITH WHAT SOCIAL (IN)SECURITY STOLE FROM US invested in sound investments, we could start programs to take care of the genuine 1% who are permanently disabled and unable to earn an income in America and ensure they have the healthcare, food and services needed to live with dignity.

Would some able bodied workers spend more than they make and save nothing for retirement? Definitely. But family and people are supposed to help others, we are more effective than any government entity. And in the mean time, if you know someone consumed by stuffitis and spends like a drunken congressmen or senator, give them a loving kick in the ass they need to grow up and live on less than they make.

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