@JoSigurd92 So the baby boomers are the only employees? No new employees to take their place? Is this it? Will there be insufficient employees to work in the US industries?
@kiyushot that's almost too stupid to reply to. Take a look a the number of persons in the baby boomer generation, then the size of generation X and Y. Did you notice the baby boomer generation is ENORMOUS in comparison? Now, when that MASSIVE generation retires, what do you think happens? The next generation is small in comparison, and SIMPLE logic dictates we're going to have a big problem regarding what Khan explained in the video. Did you even watch it, or are you just trolling?
The money the participants put into the independent 'Trust Fund' rather than into the
general operating fund, and therefore, would only be used to fund the Social Security
Retirement Program, and no other Government program, and, under Lyndon Johnson the money was moved to The General Fund and spent to fund other programs.
2. you should be able to get your money back as long as the government doesnt waste it on their budget, in a ponzi scheme it's theoretically impossible to pay all investors.
@MrBigEnchilada 1.It being mandatory has nothing to do with it. In fact it makes it worse if it is really a ponzi scheme.
2. That's wrong. First, demographic trends break the system, as shown by Sal, with the populayion going older money coming in lowers and money coming out increses. Second, the money from the trust fund is "invested" into buying Government bonds and is re-supplied with taxes, in a way that demands ever-increasing taxes to sustain itself. So yes, it is a ponzi scheme.
@PressForFreedom I like your comment except for the part about the gov't having spent the money on things like wars. While technically true, the fact is that once the excess money was converted into gov't bonds it became a loan to the general fund in the treasury and went toward any and every expense imaginable. Now, if they also borrowed against the trust fund as an asset, that is an illegal accounting error because you cannot borrow using your debt as collateral. It doesn't make sense.
Sal, you missed the key part of the trust fund problem. ALL of the trust fund's holding are in gov't bonds. This means that that money was loaned to the gov't and SPENT as it was taken in. As soon as the treaury has to start paying out of the trust fund, those bonds will have to be repaid by the gov't by taxing the taxpayers directly or printing money and inflating the currency which is already inflated which is just an indirect form of taxation. BTW, it is also generational wealth shift. Theft!
so in theory all we have to do is make sure the population continues to increase and this model should work with the surplus there as a net incase population growth slows.
@cyberspace17 WRONG! The truth is far worse. Every dollar of of "extra" SSI taxes that were withheld EVER were converted to gov't bonds and those bonds were then put into the "trust fund". Any actual value that there was is then directed to the general fund. So we have a ton of IOU's in the "trust fund" and we are in debt so the "savings" were spent years ago. We have until 2018 until the incoming SSI matches the outgoing. Then the gov't will have to tax us to pay back the SSI trust fund bonds.
This video is HIGHLY misleading. In the US, there is no sovereign wealth fund, no stash of cash. The surplus has been used to reduce the current level of taxation relative to the level of government spending, deficit and inflation that we experience. As a result the "social security trust fund" is empty NOW and in fact this has been the case since the beginning. Over taxing wages now (currently abut 15.3% of total wages under $107k) does nothing to prop up social security over the long run.
@bmartin97086 True, the "trust fund" is made up of gov't bonds and the real savings were used to fund normal day to day gov't expenditures. This is how it has been from day uno and it will come to a head in 2018 when the amount scheduled to come into the treasury monthly meets the amount scheduled to go out. Then they will start to tax us even more to make ends meet. Soc. Sec. witholdings have already gone from 1% to 15.3% since its inception. I foresee it hitting 30% before people get pissedoff
In your conclusion you make a mistaken assuption, i.e. that the government must operate out of a budget based on taxes. Federal government spending is not revenue constrained, i.e. it is not dependent on tax revenues. or borrowing. The government is the monopoly producer of dollars and may as a practical matter spend whatever it wants, the one constraint being inflation. My point is that the government may spend at a deficit to finance social secutiry until the population numbers change.
@goyomarquez Actually, the US gov't is not in control of the monetary supply. A private bank called the Federal Reserve controls the monetary supply and the Congress and President have no control over it. They gave up this control when they wrote a bill granting this private bank a monopoly over the US dollar in 1913. Since then, any action by Congress to control the monetary supply has been only to keep up the appearance of normality in this corrupt system.
social security is not an entitlement program because you and your employer actually have to pay taxes into it. I think they're just going to try to push the age limit of SS up and up because they know we dont have enough workers to support those who have retired and paid into the system!!
i don think its a ponzi scheme but its not a good system in the future.
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation.
SSI has been paying benefits from current taxpayers from day one. Also, it only holds gov't bonds which gain interest only through taxation or printing of money. It is a PONZI scheme of grand proportion!
@gobberpooper not essentially, literally. And in 2018 when the monthly proceeds match the liabilities they will have to raise either the FICA witholding or raise regular taxes. This is because the trust fund only invested in gov't bonds or loans to the gov't. So your parents paid into an account and they got immediate benefits of higher taxation with the promise that you would also give them a retirement and pay back all the extra tax money that they spent. It is generational theft.
@PressForFreedom ponzi scheme: A form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.
it's worth noting that the SS Trust and the Medicare Trust aren't actually accounts with trillions of cash set aside: all that money has already been spent, the trusts actually have Treasuries instead of cash. Doesn't sound bad at first but think about it...the goverment owes to money to itself, which basically means the same as not having the money
what he forgot to metion is the "social sercurity trust fund" does not exist in reality. It exist on paper because the "trust fund" hold a lot of treasuries which meant the government spent all that money and wrote an I owe you to the fund.
"We have a surplus. As more people are on the right we spend more, but we have a surplus so we'll spend that!" Isn't that what Bush junior did with the economy?
Seems like a good business model! Have a bunch of suckers pay in to an insolvent system to pay out to those who get in early.
Oh wait, isn't that what Madoff went to prison for? Honestly, there is little difference if any between how social security operates and a Ponzi scheme.
I want to opt out of social security. I know it wont be there for when I retire, and even if it would be, I'd still want to be responsible for my own retirement.
OUR GOVERNMENT IS STEALING OUR SS, MEDICARE, ETC TO MAKE UP FOR THE NATIONAL DEBT. OBAMA SHOULD CUT POLITICIANS' SALARIES WHO AREN'T EVEN DOING THEIR JOBS RIGHT
Feels like a Ponzi scheme. It needs more 'mandatory' investors. The SS Trust would have done better if left as cash and not US Treasuries; becoming another debt obligation of the US government.
This is assuming that the number of people being taxed does not increase, right? As long as the population continues to grow, and jobs are available, the surplus could still exist beyond that time. Problem is jobs.
Thanks Mr. Sal. Educating on us about the economy is extremely helpful right now. It's great to just hear the facts and letting us (the people) make up our own minds.
All wrong if we manage to have more current workers than people receiving Social Security?
kiyushot 1 week ago
@kiyushot With the baby boomers retiring, I don't see how that's a possibility.
JoSigurd92 6 days ago
@JoSigurd92 So the baby boomers are the only employees? No new employees to take their place? Is this it? Will there be insufficient employees to work in the US industries?
kiyushot 4 days ago
@kiyushot that's almost too stupid to reply to. Take a look a the number of persons in the baby boomer generation, then the size of generation X and Y. Did you notice the baby boomer generation is ENORMOUS in comparison? Now, when that MASSIVE generation retires, what do you think happens? The next generation is small in comparison, and SIMPLE logic dictates we're going to have a big problem regarding what Khan explained in the video. Did you even watch it, or are you just trolling?
JoSigurd92 3 days ago
The money the participants put into the independent 'Trust Fund' rather than into the
general operating fund, and therefore, would only be used to fund the Social Security
Retirement Program, and no other Government program, and, under Lyndon Johnson the money was moved to The General Fund and spent to fund other programs.
CheckM8King2 2 months ago
social security is not a ponzi scheme because:
1. its mandatory, ponzi schemes are not
2. you should be able to get your money back as long as the government doesnt waste it on their budget, in a ponzi scheme it's theoretically impossible to pay all investors.
MrBigEnchilada 2 months ago
@MrBigEnchilada 1.It being mandatory has nothing to do with it. In fact it makes it worse if it is really a ponzi scheme.
2. That's wrong. First, demographic trends break the system, as shown by Sal, with the populayion going older money coming in lowers and money coming out increses. Second, the money from the trust fund is "invested" into buying Government bonds and is re-supplied with taxes, in a way that demands ever-increasing taxes to sustain itself. So yes, it is a ponzi scheme.
Chaos511 2 months ago
@PressForFreedom I like your comment except for the part about the gov't having spent the money on things like wars. While technically true, the fact is that once the excess money was converted into gov't bonds it became a loan to the general fund in the treasury and went toward any and every expense imaginable. Now, if they also borrowed against the trust fund as an asset, that is an illegal accounting error because you cannot borrow using your debt as collateral. It doesn't make sense.
dlstb 2 months ago
Sal, you missed the key part of the trust fund problem. ALL of the trust fund's holding are in gov't bonds. This means that that money was loaned to the gov't and SPENT as it was taken in. As soon as the treaury has to start paying out of the trust fund, those bonds will have to be repaid by the gov't by taxing the taxpayers directly or printing money and inflating the currency which is already inflated which is just an indirect form of taxation. BTW, it is also generational wealth shift. Theft!
dlstb 2 months ago
so in theory all we have to do is make sure the population continues to increase and this model should work with the surplus there as a net incase population growth slows.
cyberspace17 3 months ago
@cyberspace17 WRONG! The truth is far worse. Every dollar of of "extra" SSI taxes that were withheld EVER were converted to gov't bonds and those bonds were then put into the "trust fund". Any actual value that there was is then directed to the general fund. So we have a ton of IOU's in the "trust fund" and we are in debt so the "savings" were spent years ago. We have until 2018 until the incoming SSI matches the outgoing. Then the gov't will have to tax us to pay back the SSI trust fund bonds.
dlstb 2 months ago
Comment removed
ActivStudios 3 months ago
After Efica, Emed, state and federal income tax, and "XKYS8-----", my weekly payment to Uncle sam is about 130 dollars.
In all that's 520 a month.
But don't people on social security benefits receive more than just $520 a month?
10majfar 3 months ago
This video is HIGHLY misleading. In the US, there is no sovereign wealth fund, no stash of cash. The surplus has been used to reduce the current level of taxation relative to the level of government spending, deficit and inflation that we experience. As a result the "social security trust fund" is empty NOW and in fact this has been the case since the beginning. Over taxing wages now (currently abut 15.3% of total wages under $107k) does nothing to prop up social security over the long run.
bmartin97086 3 months ago
@bmartin97086 True, the "trust fund" is made up of gov't bonds and the real savings were used to fund normal day to day gov't expenditures. This is how it has been from day uno and it will come to a head in 2018 when the amount scheduled to come into the treasury monthly meets the amount scheduled to go out. Then they will start to tax us even more to make ends meet. Soc. Sec. witholdings have already gone from 1% to 15.3% since its inception. I foresee it hitting 30% before people get pissedoff
dlstb 2 months ago
Why would you want to wait for social security though? You seem like a very well-off guy, haven't you made millions on your videos?
FortNikitaBullion 3 months ago
So social security is really insurance against outliving your retirement savings and plans, not a retirement plan itself?
FortNikitaBullion 3 months ago
At least someone knows how SS works. Maybe we should send this to most politicians.
webmastertool 3 months ago
I find it a little annoying when you read out stuff while you're writing. Besides that, I think you're changing the world.
excitingken 3 months ago
In your conclusion you make a mistaken assuption, i.e. that the government must operate out of a budget based on taxes. Federal government spending is not revenue constrained, i.e. it is not dependent on tax revenues. or borrowing. The government is the monopoly producer of dollars and may as a practical matter spend whatever it wants, the one constraint being inflation. My point is that the government may spend at a deficit to finance social secutiry until the population numbers change.
goyomarquez 5 months ago
@goyomarquez Actually, the US gov't is not in control of the monetary supply. A private bank called the Federal Reserve controls the monetary supply and the Congress and President have no control over it. They gave up this control when they wrote a bill granting this private bank a monopoly over the US dollar in 1913. Since then, any action by Congress to control the monetary supply has been only to keep up the appearance of normality in this corrupt system.
dlstb 2 months ago
social security is not an entitlement program because you and your employer actually have to pay taxes into it. I think they're just going to try to push the age limit of SS up and up because they know we dont have enough workers to support those who have retired and paid into the system!!
i don think its a ponzi scheme but its not a good system in the future.
MrBigEnchilada 7 months ago
@MrBigEnchilada Ponzi scheme definition...
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation.
SSI has been paying benefits from current taxpayers from day one. Also, it only holds gov't bonds which gain interest only through taxation or printing of money. It is a PONZI scheme of grand proportion!
dlstb 2 months ago
I hope you keep making videos even in retirement Sal.
guerillachan20 7 months ago
@PressForFreedom i see you are an active practitioner of doublethink
djancak 7 months ago
wow i had no idea that's what social security actually is. so in reality, i'm essentially paying for my parents' retirement?
gobberpooper 7 months ago
@gobberpooper not essentially, literally. And in 2018 when the monthly proceeds match the liabilities they will have to raise either the FICA witholding or raise regular taxes. This is because the trust fund only invested in gov't bonds or loans to the gov't. So your parents paid into an account and they got immediate benefits of higher taxation with the promise that you would also give them a retirement and pay back all the extra tax money that they spent. It is generational theft.
dlstb 2 months ago
@PressForFreedom ponzi scheme: A form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.
djancak 7 months ago
Socialize health care (it's cheaper) and cut the military (it's bloated).
There.
Next problem?
HatchetsNCleavers 7 months ago
I love how Sal teaches these slightly depressing realities with a jolly and enthusiastic tone of voice. Reminiscent of George Carlin :)
TheAustinConlon 7 months ago
@PressForFreedom do you consider getting $500 a month to pay for the rent and beans and rice a big profit
djancak 7 months ago
That's in theory, but in practice....
bomberfun1 7 months ago
fica? fyca? what is that.?
Fighterftwful 7 months ago
it's worth noting that the SS Trust and the Medicare Trust aren't actually accounts with trillions of cash set aside: all that money has already been spent, the trusts actually have Treasuries instead of cash. Doesn't sound bad at first but think about it...the goverment owes to money to itself, which basically means the same as not having the money
zdavid2009 7 months ago 2
this is the effect of an ageing population
Epicdemicz 7 months ago
thank you for this, Sal. now can you forward this to those idiots in Washington?
arivas713 7 months ago
so basically i cant retire ever.. great...
cimadgaline 7 months ago
Please do more economy videos, its really helpful. This would help the youngsters to understand and care about the economy.
crumcon 7 months ago 2
@crumcon I really doubt many "youngsters" will look these videos up. Most of my friends can't even define economy...
BlackFlashDrive 7 months ago
@BlackFlashDrive 22 years old, just got done watching this vid
GoBlue23118 5 months ago
what he forgot to metion is the "social sercurity trust fund" does not exist in reality. It exist on paper because the "trust fund" hold a lot of treasuries which meant the government spent all that money and wrote an I owe you to the fund.
billychen13 7 months ago 5
This is the brilliant service that republicans have been trying to destroy for the last 30 years to appease their corporate masters....
fatman1001 7 months ago
Might you include how much money congress has taken from the SS Trust and spent on other gov programs non-related to Social Security?
DeeplyBreathing 7 months ago
yeah were fucked
oneyedo 7 months ago
Awesome
eagleduzt 7 months ago
Another clear explanation. Very well done.
sonnybrown 7 months ago
So it's a ponzi scheme?
sonnybrown 7 months ago
Poor Sal. By the time he retires, there wont be any more SS money for him!!!
masakmerah 7 months ago
can u do a video on bank accounts and stuff?
AnotherBrownKid 7 months ago
I'm 48. I have survived old age. Whooo!
GlorifiedTruth 7 months ago
@PressForFreedom this is not a ponzi scheme. ponzi schemes are intended for making profits. there are no profits involved here.
djancak 7 months ago 2
Repetition helps with learning.
Thanks for the video. Very informative!
KrazieMaps 7 months ago
@KrazieMaps Very true
fighter91 7 months ago
how does this tie in to social security numbers? anyone care to explain?
sug15 7 months ago
Why do you repeat yourself so often? It takes away from the focus of your discussion.
j00d00d 7 months ago
@j00d00d
He's only repeating something while he is writing, which takes way longer than saying the same thing. So what do you expect? Awkward silence?
superdau 7 months ago
Ohhh so this is how you run a ponze scheme :>
Karmakameleeon 7 months ago
Basics on how social security works or doesn't.
Zorn101 7 months ago
"We have a surplus. As more people are on the right we spend more, but we have a surplus so we'll spend that!" Isn't that what Bush junior did with the economy?
MikeJoeShmoe 7 months ago
Thanks for the very informative video,
arabidopsis1 7 months ago 9
Those pesky old people again.
mrbr549 7 months ago
@mrbr549
you'll be one of those "pesky old people" on day too
chevytheplayer 7 months ago
@chevytheplayer That's my point Bro.
mrbr549 7 months ago
Seems like a good business model! Have a bunch of suckers pay in to an insolvent system to pay out to those who get in early.
Oh wait, isn't that what Madoff went to prison for? Honestly, there is little difference if any between how social security operates and a Ponzi scheme.
I want to opt out of social security. I know it wont be there for when I retire, and even if it would be, I'd still want to be responsible for my own retirement.
cilution 7 months ago
Would raising the retirement age several years be enough to allow Social Security to survive the retirement of the baby boomers?
marc81495 7 months ago
nice, thx sal
cool70200 7 months ago
OUR GOVERNMENT IS STEALING OUR SS, MEDICARE, ETC TO MAKE UP FOR THE NATIONAL DEBT. OBAMA SHOULD CUT POLITICIANS' SALARIES WHO AREN'T EVEN DOING THEIR JOBS RIGHT
MetaIhead89 7 months ago
Feels like a Ponzi scheme. It needs more 'mandatory' investors. The SS Trust would have done better if left as cash and not US Treasuries; becoming another debt obligation of the US government.
siggyboss 7 months ago
More US focused vids incoming =(
weckar 7 months ago
This is assuming that the number of people being taxed does not increase, right? As long as the population continues to grow, and jobs are available, the surplus could still exist beyond that time. Problem is jobs.
Zlibservacratican 7 months ago
Thanks Mr. Sal. Educating on us about the economy is extremely helpful right now. It's great to just hear the facts and letting us (the people) make up our own minds.
SonofDust777 7 months ago 36
This has been flagged as spam show
Ron Paul's plan will balance the budget in 3 years without raising taxes!
Social programs remain untouched as the BIG problems are resolved.
Government employees will be phased out as they quit/retire or moved to other jobs. Learn more at /watch?v=IQAHziV3HoM
vechorik 4 months ago
Sal do more in bio and physics... Pleesh..!
Khanacademyr0cks 7 months ago