View source for The gubmint stole $2 million from me

<!-- you can have any number of categories here -->
[[Category:Enough Libertarian Spam]]
[[Category:Social Security]]
<!-- 1 URL must be followed by >= 0 Other URL and Old URL and 1 End URL.-->
{{URL | url = https://www.reddit.com/r/EnoughLibertarianSpam/comments/d86rf8/the_gubmint_stole_2_million_from_me/}}
<!-- {{Other URL | url = }} -->
<!-- {{Old URL | url = }} -->
{{End URL}}
{{DES | des = Bad math and false assumptions "prove" [[Social Security]] is theft.  A stupid meme is debunked in the comments. | show=}}
<!-- insert wiki page text here -->
<!-- DPL has problems with categories that have a single quote in them.  Use these explicit workarounds. -->
<!-- otherwise, we would use {{Links}} and {{Quotes}}  -->
{{List|title=The gubmint stole $2 million from me|links=true}}
{{Quotations|title=The gubmint stole $2 million from me|quotes=true}}

{{Text |
By the time I am 67, over $600,000 will be paid into #SocialSecurity on my behalf.  That money would have been worth $1.9M if I had gotten a 5% return.  My annual interest would be $95K.  The Government promises me $3,075/month at 67, which is $37K/year.  how is this not THEFT?

sorted by: best

formatting helpcontent policy
save
[–]cobbett 55 points 2 hours ago 
You sacrifice the 5% annual return in exchange for not being a slave to the market. If the market tanks when your 64 you are left with nothing. Even if it doesn’t, the idea of your entire family possibly needing to carry you as a burden for the rest of your life if your bets don’t play well, is the exact reason for social security.
Better take, increase capital gains tax to that of earned income, decrease SSDI contributions based on real income levels with those at the bottom paying little to nothing. Fund infrastructure projects that employ people with the invested income distributing it amongst working people’s and multiplying the wealth.
Added productivity corresponding with wage increases lifts people out of poverty while increasing total overall economic yield. This creating more wealth to be spent at businesses which then increases value of the capital assets that were taxed to begin with. Difference being, the stock market is taken out of the equation, the ones who need the money the most are protected, the poor are able to move up, the country gets its crumbling infrastructure rebuilt, the local economies become stimulated, and only then are the capitalist ruling classes reimbursed in the form of added shareholder value.
permalinkembedsavegive awardreply
[–]PKMKII 18 points 2 hours ago 
Also, let’s be honest, given the kind of shenanigans you see in pension funds like CALpers and KRS, it’s a lot more likely to be a rate of return lower than a typical large cap index fund, along with hefty fees being skimmed by whatever corrupt, politically connected hedge fund wins the contract to manage the SS investments.
Not to mention, if the federal government is taking billions of public dollars to buy up stocks, doesn’t that functionally mean it’s the government turning private capital (as stocks are shares of ownership) into public property? That sounds like the sort of economics libertarians aren’t too keen on.
permalinkembedsaveparentgive awardreply
[–]gordo65 14 points 42 minutes ago* 
Remember, do not accept the Libertarians' premises at face value.
The government forces his employer to pony up half of that $600k. So if we're talking about doing away with Social Security, the $95k in interest immediately becomes $47.5k.
The calculation only works if he puts all $600,000 in on the first day that he starts working. But since the money is paid out over the course of half a century, the compound interest on 5% is going to come to considerably less than $1.3 million.
The government doesn't promise $37k/yr. That's the maximum a person can receive, and you can't get that much if you retire before age 70. Your benefit is based on the amount that you pay into the system, so this doufus might wind up paying in considerably less than $600k, and receiving considerably less than $37k/yr in inflation-adjusted dollars. Keep that concept in mind, because it becomes important when analyzing the relative benefits of private investments vs social security.
A 30-year Treasury bond pays a little over 2%, not 5%.
So by paying into Social Security, here's what you get:
A guaranteed benefit. The benefit can fluctuate somewhat based on changes that are made to the program, but it will fluctuate a lot less than a 401k would. Talk to any professional investor, and they'll tell you that this level of security is quite valuable. That's why so many professional investors, government investment funds, and corporations buy US Treasury bonds.
A benefit that grows with inflation, even though the money is invested in pre-inflationary dollars. In other words, you effectively get a premium on your secure investment that's roughly equal to the inflation rate. That's one of the reasons you wind up with more of a benefit with Social Security than you would have if you had just bought the treasury bonds yourself.
An employer contribution. I get that you'd probably get a little more if your employer was not charged a Social Security tax, but the difference in pay would almost certainly be less than your employer contributes to the Social Security fund.
At the end of the day, most people wind up with considerably more money with Social Security than they would have without it, which is why you don't see very many people who have $1.9 million in that bank and $95k in investment income when they retire. Senior citizens are now the demographic that is the LEAST likely to live in poverty. Before the Social Security Act, seniors were the demographic that was the MOST likely to live in poverty.
tl;dr: Social Security is a very good deal for American workers, and you should never assume that the facts and figures provided by a Libertarian are correct.
permalinkembedsaveparentgive awardreply
[–]revolutionPanda 12 points an hour ago 
the idea of your entire family possibly needing to carry you as a burden
You mean society as a whole. But libertarians don't believe in society.
permalinkembedsaveparentgive awardreply
[–]FestiveVat 30 points 2 hours ago 
Hell, imagine if you got more than a 5% rate of return. Let's claim the government stole a billion dollars from you while we're making stuff up.
permalinkembedsavegive awardreply
[–]Ambrose_bierce89 20 points 2 hours ago 
Does he not know what happened in 2008?
permalinkembedsavegive awardreply
[–]PhoenicianPirate 10 points an hour ago 
Or 1929. Or 1987. Or 2001 dotcom bubble...
permalinkembedsaveparentgive awardreply
[–]haus_der_luege 31 points an hour ago 
Let's do some math. If this fuckknuckle is telling the truth, and we assume he (it's always a fucking he saying this shit) started working full time at age 17, he paid $12,000 per year in Social Security taxes. The Social Security tax rate is 6.2%. This means that Shitwit McBurningpants here was making $193,548.38 per year every year for 50 fucking years.
But wait, there's more! Social Security withholding is capped at the first $132,900 of income! So the maximum anyone ever pays per year is $8239.80. So Fuckbucket here would have to have earned at least $132,900 per year for 72 fucking years in order to pay $600K in taxes.
permalinkembedsavegive awardreply
[–]I_hate_bigotry 6 points an hour ago 
Fitting username.
permalinkembedsaveparentgive awardreply
[–]Charlie_Warlie 5 points an hour ago 
I looked through the libertarian post's comments and found this. I don't know enough about this stuff myself to say if it's right or wrong
I think your math is way off.
It said "paid on my behalf." That would include the 50% paid by the employer so it is up from 6.2% to 12.4%. Now he only needs to make $4.8m in a lifetime. Also I am going to guess he probably worked more than 30 years by the time he retired at 67.
So realistic numbers using 2019 limits:
Employee contribution cap is $8,239.80
Employee contribution + Employer contribution = $16,479
600,000/16479 = 36.4 years at maximum contribution or above
So the least the guy could have worked is 36.4 years at $132k/year and made $0 for the rest of his life. If he managed to get working before 30 then we can drop that yearly some.
permalinkembedsaveparentgive awardreply
[–]sdoorex 3 points an hour ago 
Not that I agree with their point but they did say "on their behalf" which would include the employer contribution as well bringing it up to 12.4% from 6.2%.
permalinkembedsaveparentgive awardreply
[–]haus_der_luege 8 points an hour ago 
OK great, that's 37 years earning over $130K/year. Still a load of horseshit, exacerbated by the idiotic assumption that their employer would just blithely hand over the money they weren't paying in payroll taxes.
permalinkembedsaveparentgive awardreply
[–]froggiechick 6 points 2 hours ago 
How does this person get to work? Im gonna guess by using roads and infrastructure to keep the roads safe. When he turns on his tap, he knows that the municipality has tested it and made sure it was safe to drink.
These things arent free. They are paid with taxes. I could go on and on with other examples like this.
permalinkembedsavegive awardreply
[–]poisontongue 6 points an hour ago 
Dude probably imagines he'll fly there in his magic car. Or some private charity will build roads for him to use. Or he'll build them himself because they always do everything themselves*.
Or all of them, in the great, big delusion they suffer from.
permalinkembedsaveparentgive awardreply
[–]PhoenicianPirate 1 point an hour ago 
A road built with charity... Yeah not going to happen. Also privately built roads and bridges will be tolled up the ass. This is what happened in Medieval Germany eith the original robber barons.
permalinkembedsaveparentgive awardreply
[–]poisontongue 5 points an hour ago 
Oh god I have to pay for the government to do things just like the Founding Fathers determined with their original failure called the Articles of Confederation, how dare they build roads and schools and retirement funds and other shit that leads to a functional society. I can't imagine why something like Social Society would exist after the Great Depression, just like I can't imagine why we have laws against minimum wage and child labor - I thought the market would take care of it, hurp durp.
MUH MONEY! MEEEEEE!
If you're talking about pointless wars and tax breaks meant to enrich the wealthy or Trump's golf outings, then you have a point. But yes, let's bitch about fucking Social Security like the winners we are. I'm sure this person is also convinced that there is some vast Social Security fraud going on under their nose too. Go bitch about what your boss is stealing, along with his boss, the CEO, and the shareholders.
permalinkembedsavegive awardreply
[–]StrngBrew 5 points an hour ago 
Where does he think he's getting 5% interest? It's been almost 20 years since you'd have gotten that on savings
permalinkembedsavegive awardreply
[–]frezik 4 points 51 minutes ago 
On a long enough timespan to let averages do their thing, you can get around 7% on an S&P500 index. There will be dips and spikes, but since we're talking decades, those average out.
The point of Social Security is a) to help people who don't have access to any other kind of retirement, and b) be a low-risk retirement account. If the stock market crashes just before you retire, at least you'll have something.
permalinkembedsaveparentgive awardreply
[–]StrngBrew 2 points 40 minutes ago 
He did very specifically say "interest"
permalinkembedsaveparentgive awardreply
[–]frezik 3 points 29 minutes ago 
Fair. But hey, it's not like we can expect libertarians to carefully consider the terms used in economics.
permalinkembedsaveparentgive awardreply
[–]bereved 7 points an hour ago 
Because the interest rate you could expect to get is really more like .25% than 5%??? Fucking idiots
permalinkembedsavegive awardreply
[–]mcg42ray 3 points 20 minutes ago 
If Social Security is such a bad deal then why don't these morons just start their own investment company offering a better deal than Social Security and then get really rich?
I wonder why somebody hasn't already done that.
permalinkembedsavegive awardreply
}}