How many of you, if given the chance, would opt out of Social Security if you could? I believe many would, as the money “put away” into Social Security has been recently used to pay for wars and other government programs, acting as a kind of a slush fund.
I definitely know that I would opt out of the program, which takes 4.2% (down from 6.2% as of the first of the year) out of my paycheck, money which I know for sure I will never see, as it is projected to run out by 2037 (though I expect it will dry up much sooner with our country’s economic problems). In 2037, if Social Security even remains viable, I will be 44, way below the age to start drawing benefits.
I would much rather keep my entire paycheck and do with my money what I please. If I blow it all and save none for retirement, that is my business. If I save it for retirement, that is also my business. I do not think the government needs any place in taking my money now, giving it to the retirees, and later, having me collect my Social Security from future employees. Essentially, Social Security is a Ponzi scheme. The SEC website’s definition of a Ponzi scheme is the following:
A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.
Payment of purported returns to existing investors from funds contributed by new investors? Sounds a lot like the way Social Security is paid — from current investors in Social Security (you and me, assuming you work a job where taxes are withheld) to former investors in Social Security (those who paid in all the years they worked/baby boomers/retirees).
And what else looks similar? “The fraudsters focus on attracting new money [you and me who have taxed incomes — of course we needed work to pay for school, gas, food, and living accomodations] to make promised payments to earlier stage investors [baby boomers/retirees] and to use for personal expenses [like using that money for wars and bailouts] , instead of engaging in any legitimate investment activity [if the government was going to take my money and promise it back to me when I retire, I’d hope at the minimum, they would put it in well-performing stocks, if not gold or silver].”
So in a sense, the SEC definition of a Ponzi scheme is almost exactly what Social Security is in the way it works. The notorious Bernie Madoff was sentenced to 150 years in prison for running a Ponzi scheme. This reminds me of the bumper sticker “Don’t Steal, The Government Hates Competition.” They have a monopoly on murder, theft, and many other things that American citizens would go away for, but when the government does it, it is for the common good (taxation and wealth redistribution, in short theft), for “liberating the oppressed” (wars overseas), and to make the country “secure” (wiretaps and the PATRIOT Act).
What would I do with my money that I was finally able to keep assuming tomorrow by some miraculous occurence, I could opt out of Social Security? I would most likely invest it in gold and silver (long-term investments that continue to gain market value, as well as hedging against inflation), firearms and ammunition which continually will gain value in the light of tightening government restrictions in some areas, as well as the scarcity of metals needed to make ammunition, and in a economic collapse situation, be the tools to hunt with and provide food, as well as to provide security from individuals who will no doubt take to theft and terror to survive.
One thing I would not invest in for retirement (and this is my personal opinion) is the stock market. I have a few reasons for this. One of them is that, hypothetically, a CEO could drop dead and the person succeeding would make awful business decisions, leading to the drop of the stock. Stocks have an unfortunate downside in that they are tied to the actions of people, who are inherently flawed. The other is that stocks are tied to the dollar, which continually loses value. I would be tempted to invest in stocks if they were tied to say, a commodity, like gold or silver, but since they are not, I will not take that risk. I don’t have the type of money to gamble on the stock market. What little money I’ve acquired recently I have put into 1 oz. silver rounds and bars, which I bought for between $34 and $40 a piece. Good for me as silver and other commodities have been going up in the last few weeks. Commodities will have a great return.
All of the above was assuming I could put that money in my own investments. As it stands now, I still take a sizable portion of my paycheck and put it into commodities because I know Social Security will not be around very much longer. I suggest others invest some of their money in private investments as well if they have not started yet.
What about you? Would you opt out? And if so, what would you invest that money in?
Also, see another great piece on opting out of Social Security, and a proposed alternative (the SAFE ACT, HR 2109, a bill proposed by Congressman Pete Sessions) to it, from Daniel Horowitz.Published in