Social Security

2/4/95 12:41 AM Eastern Daylight Time

Is there anyone out there who knows what's going on in the drive for means
testing for Social Security? I heard something about The Concord Coalition
(or something like that) led by Paul Tsongas. I'd appreciate a post or
e-mail from anyone who has more info.


Subject: Social Security
Date: 2/14/95 2:32 PM Eastern Daylight Time
From: N3IC

Question: What can realistically be done with Social Security?

From: N3IC@Aol.Com
Robert E. Glaser
Owings Mills, MD

Fellow Libertarians:

I guess that most of us would agree that the federally imposed
"Retirement Plan" (FICA) and its medical insurance spin-off, "Medicare," are
clearly not in line with libertarian views. I suspect that the introduction
of Social Security may have begun the downward spiral leading to a prevalent
attitude of today's generation: a lack of personal responsibility combined
with the concomitent expectation that Big Brother will care for all of its
metaphorical children. Another well-intentioned plan gone
awry. But what can we propose to do about it?

First, the actual magnitude of these "employment taxes" must be made
evident: for most employees, it is 15.3%. For those earning more than
$61,200 the figure is 15.3% of the first $61,200 plus 2.9% of the amount
exceeding $61,200. And, unlike the income tax, this figure is before any
deductions of any type. The federal system hides half of the amount, calling
it the "employer's" half; so the average person only realizes that he pays
7.65%, the "employee's" half. Common anti-business sentiment
holds that the Big Bad Businessman can easily afford his half, so this money
magically appears on the behalf of the employee. Of course, the money must
either be provided by reducing the employee's wages accordingly; raising the
company's prices for its products (passing the cost along to all of its
customers); or reducing the corporation's retained profits (which would
either be used to expand the business or pay dividends to the shareholders).
Usually it is only the self-employed, or business
owners, who realize what the actual burden of these taxes is.

Second, I think we must make it clear to the general population that
Social Security is not what it is often masqueraded as: an actual Trust
Fund, which is fiducially sound, set apart from general funds, and invested
in some financially viable fashion. People are beginning to understand this.

Third, the Social Security System must be exposed as what it truly is:
a pyramid scheme. Such schemes are illegal when devised for the private
sector, even when full disclosure is performed and the subscribers enter

I have heard proposals as drastic as immediately disbanding Social
Security and returning to its depositors all monies collected to that date.
Let's face it -- that is just not going to happen. Consider this a
solicitation for ideas which have a nonzero probability of being implemented
within our lifetimes.

*** My proposal is as follows ***

My plan is to gradually wean the population from the system, until
everyone is personally responsible for his own retirement and medical plan.
In order to make this financially sound, we must ensure that the payouts are
indeed governed by the income of the so-called Trust Fund. I want to
incrementally taper the size of this fund down until it is zero.

First, we need to pick an age, which I'll refer to as the "Option Age."
Everyone above the Option Age gets a voluntary one-way choice to Opt Out of
the system. Once Opted Out, no further Social Security taxes are assessed;
no benefits may be claimed; and the election to Opt Out is irrevocable. Any
employment taxes previously paid in are essentially lost.

Clearly, senior citizens have little incentive to Opt Out, as they have
already paid in lots of money, and are either receiving or imminently about
to receive benefits. Just as clearly, young people have great incentive to
Opt Out, before the bulk of the taxes are paid; and, hopefully, they have a
long time to select and pay in to a retirement plan suitable for their

Make social security voluntary. Those who opt out can get back their
"contributions" to do whatever they want with it.

Subject: Re:Social Security
Date: 2/19/95 2:23 PM Eastern Daylight Time
From: POB309

As a self-employed person, I again have had to pay no "taxes;" however, they
have hit me over the head with the Self Employment tax. What a waste of my
money and everybody else.

Subject: Social Security
Date: 3/7/95 10:00 PM Eastern Daylight Time
From: JerryMan1

As a "just registered" Libertarian (I just switched from Democrat), I am new
to this. I have read the platform and program and finally feel like there's
something I can support. On the Social Security issue, my only concern is
that, as I see some of you have already suggested, it would have to be
optional. I agree with the fact that it would have to be delicately handled,
as many older people are at this point relying on it. Where is the money
currently going (don't laugh too loud)? Is it being used to
support people currently living off of it? What else is it being used for? I
imagine the option (to participate or invest the money yourself) would have
to be allowed for people UNDER a certain age, as someone has previously
mentioned. That way, people using the money now can still have a source of
income. Also, it doesn't seem fair that if someone chose to opt out of the
Social Security plan, they would lose all the money they've stored so far.
Any opinions on this?

Subject: Re:Social Security
Date: 3/8/95 1:17 AM Eastern Daylight Time
From: Freeperson

Hi Jerry!

I'm a former Democrat myself, although I opted out in 1980. Welcome to the
ideals of liberty!

Social Security money is a shell game. Money goes directly from workers
paychecks to Social Security checks. There's no investing, no savings
account. Thus, the money us working stiffs have put into is gone and can only
be recovered by continuing to dig into the pockets of the next generation.
It's an endless trap that can't be escaped so long as some hope to get their
money out of it.

I, for one, would be happy to opt out without trying to recover what I've put
in. The important thing, at this point, is simply to have the option to opt

Those who are already living on Social Security serve as an example for the
rest of us concerning why we shouldn't count on it. Retirement without
preparing for it outside of the SS system leads to poverty and personal
disaster. And it's going to get a lot worse in the coming years, as we're all
going to discover.

Subject: Re:Social Security
Date: 3/8/95 7:26 PM Eastern Daylight Time
From: JerryMan1

Thanks for the feedback, Freeman. You bring up some good points. I'm actually
beginning to understand this mess. Correct me if I'm wrong, but I guess the
real issue now is how to provide the option to back out of it, yet at the
same time not leave the people counting on it now out in the cold. Has anyone
heard any good suggestions on that one?

Subject: Re:Social Security
Date: 3/9/95 10:22 AM Eastern Daylight Time
From: Brinkman1

I would be more than happy to get out of the SS scam without getting back any
of my money. Of course, because I am 24, this is much easier on me than it
might be on others. Then again, you must consider: Is it better to withdraw
now and not get your money back, or stay in, continue to have deductions
made, and still not get your money back?

Subject: Re:Social Security
Date: 3/9/95 9:15 PM Eastern Daylight Time
From: JerryMan1

Brinkman1, that is a great point! That sums it up in a nutshell. Thanks.

Subject: Re:Social Security
Date: 3/10/95 3:55 AM Eastern Daylight Time
From: HLeopold

Brinkman1, I'm 44, and willing to lose ALL that the government has taken.

'I do hereby release all interest in moneys paid by myself to SS, etc.'

Harry F. Leopold

Subject: Re:Social Security
Date: 3/20/95 3:42 PM Eastern Daylight Time
From: POB309

Refund the money, inflating to do so, if necessary.

Subject: Re:Social Security
Date: 8/3/95 9:41 PM Eastern Daylight Time
From: Denmey

>Make social security voluntary. Those who opt out can get >back their
"contributions" to do whatever they want with it.

Social Security is already voluntary and you can get a refund. But, if you
untilize your Rights, you will be jailed as a tax protester.

Subject: Social Security
Date: 12/6/95 10:55 PM Eastern Daylight Time
From: SCdecade


As a mid-twenties Generation Xer, I can tell you all that Social Security is
the biggest ripoff in the history of the world. That's right, I am
personally being robbed by the government every two weeks to pay for the
worst "investment" in my future that I can conceivably make. Social Security
is such an oxymoron it defies belief.

The thing that really kills me is the insidiousness of the justification for
continuing the fraud that is Social Security. Since the government has
structured SS as basically a pyramid scheme, where early joiners do very well
and late comers get nothing, to suggest getting rid of SS is to proclaim that
current older Americans don't deserve to live with dignity. I want to clime
on top of the highest mountain and scream that it wasn't me that defrauded
the contributers to SS. The sad fact is that the
money that people have contributed to SS for the past x years has been SPENT
BY THE GOVERNMENT ON WHO KNOWS WHAT!!!!! Don't rip me off to pay for an IOU
that I didn't write.

As far as SS being an investment in the future this is so laughable I can
hardly address it as a serious issue. If I were to invest 12% of my salery
in 1 or 2 or 3 decent equity funds for 45 years the resultant nest egg would
be astronomical. (I am in fact doing just that and when the government tries
to take that away I am heading for the hills with my rifle) Please compare
the above investment with a promisory note from the government, backed by the
sum force of their coerce might, that I will
receive what they deem to be a reasonable amount at what they deem to be a
reasonable age AT THE TIME THAT I RETIRE!!!!!!!!!!!!!!!!!!!!!! Someone
please tell me that this is simply not true. This is too destructive even
for me to believe that people are capable of perpetrating.

My SS benefits will be decided when I retire in about 40 (sooner I hope (go
DJIA!!!!!)) years by politicians that may not even be born yet? Someone tell
me this isn't true. Tell me I don't really have to pay the money.

I saved the best for last. I have two words for any defenders of SS out
there. Means Testing. The very fact that it has been mentioned as a way to
save the SS Department money means that it will be passed by Congress. I'm
not going to lie, I'm doing very well, so this means ME! When this happens
the lie will be complete.

Subject: Re:Social Security
Date: 12/13/95 2:07 AM Eastern Daylight Time

If your gutsy enough to stand up for your rights, withdrawl from
participation and apply for a refund and invest it.

From the rage showing from your post, I'ld hate to be near you when you find
out more of the Federal scam.

Libertarian ideology is evolving. You may not see it, but its their, you can
even spot it in some Republicans. I too was angered about SS. But I hope,
that by the time Xers get to retirement age (est age 75-80 by SS standards
for that time), the Libertarians will have taken over and worked things out.

Subject: Re:Social Security
Date: 1/15/96 2:27 AM Eastern Daylight Time
From: MikeWas999

hardly address it as a serious issue. If I were to invest 12% of my salery
in 1 or 2 or 3 decent equity funds for 45 years the resultant nest egg would
be astronomical.>>

Imagine for a moment... what if ~everyone~ did that? Rip out the Social
Security taxes and the capital gans taxes, and we just might prosper as a

This idea appreantly frightens our politicians too much to enact.


Subject: Re:Social Security
Date: 1/17/96 4:22 AM Eastern Daylight Time
From: Alazira

It looks like my generation (I'm in my 20's--GenX?) will be the ones to pay
the price. I noticed Steve Forbes, the GOP candidate, supported the idea of
private retirement accounts but said we would still have to pay in to SS to
support those already *dependent* upon the system. It's unfair, but I would
support a "weaning" off of this so-called entitlement program.

Subject: Re:Social Security
Date: 2/5/96 2:02 AM Eastern Daylight Time

Harry Browne, the backed LP presidential candidate proposes selling all
unnecessary federal property to pay for Social Security for upto a
pre-specified age group. The younger people from then on would then be able
to ivest in their own retirement plans. After covering the S.S. debt, there
would just be barely enough to pay off the national debt.

Browne figures that there are enough excess assets to the U.S. to make about
$12 Trillion dollars from selling them. Roughly $7 Trillion would cover S.S.
and the remaining $5 Trillion would cover the national debt. After Browns
proposed 6 year plan, the cost of the U.S. government would be about $100
billion, and users fees would cover that expense.

Subject: Re:Social Security
Date: 4/28/96 12:27 PM Eastern Daylight Time

In response to Freeperson, you are absolutely correct. The way I understand
it, is that right now it takes two people paying for every person living on
the SSA. I am 24, part of the smallest generation this country has. My
parents, Babyboomers, will be collecting in ten or fifteen years. How can I
expect to cover them? I cannot. There are too many people gearing up for
retirement, expecting a bankrupt system to make good on its promises...and
the system expects people like me to cover for its
mistakes, making me the same promises. The SSA must think I have "Shmuck"
written across my forehead.

Does anyone know where I can find an organization called The Third
Please respond to EMOLIS.

Thank you.

Subject: Social Security, continued
Date: 2/14/95 2:37 PM Eastern Daylight Time
From: N3IC

[I've never used this before, it didn't seem to let me post the whole file as
one message???]

Social Security, continued
from: N3IC@AOL.Com

My plan is to initially select a fairly high Option Age -- say, 55. We
cannot initially make this too low, or many people will Opt Out, leaving no
financial base to meet the obligations of the benefit recipients. A high
Option Age will give little incentive to Opt Out. Nevertheless, some will
choose to do so (most likely, the well-to-do productive members of society).
As a small but growing older population Opts Out, the expectation of benefits
to be paid out will gradually be lowered. This
will permit the size of the Trust Fund's income to be somewhat reduced,
which is done by reducing the Option Age. Eventually, when significant
portions of the population leave the plan as the Option Age is incrementally
lowered, the remaining enrollees can be moved over to a private sector
insurance plan. We could also offer incentives to transfer from the public
to a private plan along the way.

I don't see any reason why honest legislators should oppose this plan:
it doesn't force anyone either to drop out of Social Security, or to stay in.
It can be made financially viable (the benefits package must be continually
evaluated in light of the Fund's makeup and size). AARP should not be
threatened; it is their members, in fact, who would be able to benefit by
opting out if they desire. While this is not an aggressive methodology and
is not likely to overly excite ardent Libertarians, it
at least would move us in the right direction.


Comments invited.
de N3IC

Subject: Re:Social Security, continued
Date: 2/15/95 11:52 AM Eastern Daylight Time
From: Presbyte

73's to N3IC! And thanks for joining in the discussion. You raise some very
good points.

About the message boards: Unfortunately, individual messages can't be all
that long, as you discovered. Private email can be somewhat longer, and
individual text documents (what you get when you choose "New Memo" in the
File menu, and which can be uploaded as files to our Libertarian Library)
somewhat longer still.

-Jim Merritt
Libertarian Party Forum Host
Capital Connection

Subject: Re:Social Security, continued
Date: 2/15/95 1:29 PM Eastern Daylight Time
From: Freeperson

I second the motion, N31C, but with a proviso. Let any employee opt to make
the 15.3% poyment to his/her own IRA instead. To make up the difference,
raise taxes directly. I don't see any good reason not to force social
security to be seen for what it is: an income redistribution scheme. This
should make it feasible to cut social security for those who aren't totally
dependent on it. And if we're going to redistribute income, at least make it
possible for people to provide for their own retirements,
starting at a young age.

Subject: Re:Social Security, continued
Date: 2/16/95 5:18 PM Eastern Daylight Time
From: POB309

Forget about IRA's=bank bailouts. No subsidies and no use of tax policy to
manipulate social policy. Give us the money.

Subject: Re:Social Security, continued
Date: 3/1/95 8:59 PM Eastern Daylight Time
From: MikeBSage

A comment offered.
I like the way your plan weens us off Social Security. Maybe if SS could
be re-established as an independent trust fund (as much possible given its
public nature), perhaps it could receive charitable donations to help keep it
solvent for those who are compelled to stay in the system. Who knows, the
plan could reach a point where it could be sold, or contracted, outright to
private investment firms or insurance companies. It could become a great
national challenge, like going to the moon, but only
half as aggressive. Total private retirement in 20 years, or something like
that. -Mike



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