How many times have you heard people who accept Disability checks from FedGov declare righteously: It's my money that I have paid in over the years...
Let's examine the numbers for a second, and expose the fallacy. I'll be very generous with the numbers.
Take the average guy who has worked 30 years and earned an average of $50k annually. (This is generous because the average guy doesn't earn $50k for 30 years).
That is $1.5 million gross income for the career.
Now let's look at FICA (Social Security & Medicare witholding). The rate today is 7.65%.
Let's give our hypothetical worker the benefit of that tax rate for the full 30 years. (This is generous to the worker, because the rate has not been this high for all 30 years).
At $50k per year x 7.65% FICA, our guy paid into the system $3,825 per year.
Paying $3,825 each year for 30 years is: $114,750.
The average Title II Social Security Disability check today is $979 per month.
So: $114,750 paid in divided by $979 each month in pay outs = 117 months of disability.
That 118th month, and every month after, is free money for the "Disabled" worker.
That's just under 10 years - and it does NOT include one single dime of the free medical care received. Factor in the free Medicare and we drop to far less than 10 years.
Our fictitious "Disabled" worker runs out of "...the money I paid into the system..." within 10 years, and that assumes not one, single medical visit under Medicare.
So, in the real world where our "Disabled" worker receives a check, and free Medicare, the money "He" contributed runs out in far less than 10 years.
Look around. Do you see anyone gaming the system this way? Does that person have the ability to earn income from legitimate sources? Does this person giggle like a little girl and boast about how he/she is f'n the system?
I'm all for getting the money you were forced to pay into the system back into your wallet. But if you accept one single dollar more than you paid, you are a parasite and part of the FSA.
Period.
Kerodin
III
Your overall point is correct.
ReplyDeleteTo make the example more accurate you need to include both the employer contribution and the interest that would have been accrued on both, compounded. When you do that (and SSI until last year mailed annual statements so you could use your actual numbers) what you see is that, at least for higher wage earners, you are never going to get back what you should, say if it had been a 401K type system.
If you converted Social Security retirement income to private accounts there is no need to do anything with stocks. You could require investment only in US Treasury Bonds, but at least yours would be yours.
There is no way to calculate Medicare as easily. Both programs are unconstitutional and should be abolished. In the case of SSI it would be easy to pay everyone what they are owed. (Except for we don't have the money).
I met a 20 year old girl who has a baby by some guy and gets full disability, subsidized rent, subsidized utility and her grandmother gets money for being the foster parent as she herself was declared unfit shortly after the baby's birth. The thug boyfriend lives with her even though it's a violation of the rules for the benefit. I'm sure their are people of all types gaming the system, but she is black.
In Portland, OR 49% of Blacks are on Food Stamps. There is no significnat history of racial discrimination here: Oregon wasn't part of the old South. Most blacks moved here in the WW2 and later period. Somehow though they can't figure out how to feed themselves now that they are here, so we do it for them.
There is an incredible sense of entitlement in that community. And of course the "social workers" who approve travisties like the one above are now the aunties of the girls applying.
Her comment when I asked her "why don't you get a job?" was "Work doesn't agree with me."
Who's the sucker? As the old saying goes if you look around and you don't know, it's probably YOU. Or me in this case as I pay buckets of income taxes.
It gets even more interesting. We have a huge number of "disabled" workers up here in northern Maine. My former draft horse farrier and another man who did construction for us, both of which require strength and hard work, were receiving full social security for 'disability'. The construction guy got it for, are you ready, stepping out of his car while at 'work' to smoke a cigarette and slipping on the ice. Permanent full disability payments and a lifetime supply of Oxycontin. And he works under the table to get money without taxes. No wonder we are going broke!
ReplyDeleteYou "went there". Awesome.
ReplyDeletePonzi scheme.
The money someone has been putting into the system for 30 years is mostly gone.
Stolen.
The money they're collecting now is our children's.
There is such a thing as opportunity costs. you are missing that part of the equation. If I was alllowed to keep the 3K that I put in, what could i turn that to in 30 years?
ReplyDeleteAnon: I do understand that aspect of the problem, but it is an unknown that can't be quantified.
ReplyDeleteWe need to kill the Entitlements and let people worry about themselves, so we can all do whatever we want with that extra $3k each year.
Kerodin
III