A Pension for Desolation

 

Why we need a Universal Basic Income.

What would you do if a salesman told you that he had a retirement plan that you would give sizable checks to a retirement fund and when you reach the age 65 you can start collecting payments, in exorbitant excess of what you payed in to the fund. Additionally, they say there is no risk because they don’t invest your principle in stocks and bonds. You would most likely believe that they were a scam artist, and you would be right to be skeptical of this organization. So what if I told you that you were born into this ludicrous ponzi scheme? It’s called the social security and medicare, or the more descriptively named, entitlements.

Social Security was rolled out in 1937 with the point of the program being  to help out the very elderly and people in extreme poverty. During the Great Depression many elderly poor weren’t getting proper care so the FDR Administration followed the new European model and introduced Social Security and in 1965 President Lyndon B. Johnson made Medicare in his socialist reforms known as “The Great Society” programs. So how is it a ponzi scheme?

The Merriam Webster Definition of pyramid scheme colloquially named a Ponzi scheme after Charles Ponzi, Is “A usually illegal operation in which participants pay to join and profit mainly from payments made by subsequent participants” or in English, A pyramid scheme. A pyramid scheme is an organization that compels individuals to join and make a payment. In exchange, the organization promises its new members a share of the money taken from every additional member that they recruit. Such organizations seldom provide any real value. Without creating any goods or services, the only ways for a pyramid scheme to generate revenue, are to recruit more members or solicit more money from current members. Eventually, recruiting is no longer possible due to the finite wealth of Earth and most members are unable to profit from the scheme. In the same way security and medicare need future workers to pay retired individuals while promising better benefits to the current workforce.

If you understand what I’m saying then you probably understand how it is problematic. For instance if the number of people in the workforce doesn’t grow faster than the number of recipients the game is true, but in the US the bubble has almost burst. It would be nearly impossible to fund this program long term without a job participation rate of 62% that is dropping fast and an average age of over 37. Every year more and more people are dropping out of the workforce and retiring with less money saved than previous generation’s in the US. The ratio of workers to beneficiaries in the us is is 2.8:1 [1] and it is trending to be under 2 to 1 by the time I am out of the Labor Force.[2] This will ultimately lead to the programs insolvency and cause many elderly fall into poverty.  

But I am not finished telling you the worst of it. Not only there going to be greater costs that will be put on the youth that they will never get back, but by taxing the working and industrious population at the benefit of the indolent populations. The working young will never be able to afford to have children until they are old and established, whereas miscreants who are often illegal, immigrants and minorities can have as many children as they please knowing that the government will float their tab. This continues the cycle of unvirtuous behavior, until the system collapses in which case the thieves of society will act out. The government isn’t finished yet, they would like to import more and more population to make up for the people that are not having kids. Somehow they are supposed to make our program solvent although these imported populations commonly used more resources than they pay in[3] aside from Social Security and Medicare, and have rampant unemployment and criminality.[4][5]

You may be wondering if there is anything we can do or if me are doomed to wasting our lives slaving for a pension will never receive. There are many painless ways to reform our government pension system, I will share some of the possibilities. The easiest and most probable way of doing it would be to not adjust them for inflation for three to five years, this alone will allow them to stay solvent for the foreseeable future. Another thing we can do is to stop illegal immigrants from collecting benefits and make it harder to immigrate when old. The problem with this is it only fixes the insolvency issue, it does not stop the demographic slide of your nation, due to the heavy taxing of the productive youth. So I believe we need an entire reworking of the failing system, I support a Universal Basic Income or UBI. The way It would work is by taking the current welfare and entitlement budget and spend it more fairly.

The current amount of money the federal government devotes to so called “mandatory spending” is 2.45 Trillion a year. The United States’ GDP was estimated to be $17.914 trillion as of 2015. The current tax rate for social security is 6.2% for the employer and 6.2% for the employee, or 12.4% total. The current rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total, Equaling a total rate of 15.3% for payroll taxes. I would propose a reduction of that tax to 15% and turn it into a flat net income tax, including retirees and employed with no deductions. This would net 2.68 trillion and be distributed as follows, to the 74 million people under the age of 18 would receive $2,500  = $187.5Billion a year. To the 182 million people from the ages of to 18-68 that are employed in child rearing or occupational work of 30 hours or more a week would receive $8,750 =$1.6Trillion a year. And for the elderly 29 million people over the ages of 68 or older would receive $20,000 = $580 Billion a year. Costing a grand total of $2.45Trillion a year after collection and distribution. Leaving a surplus of 230 Billion dollars a year to pay down the national debt. This plan comes with a handful of positive outcomes by lower costs to young people while giving them more resources to raise non-delinquent children, while increasing the native birthrate, this plan would effectively end poverty by offering $8,750 a year people that work for minimum wage or more and parents $7.25 x 30 = 217 x 52 = $11,250 + $8,750 = $20,000 a year.

Helping entrepreneurship and small-business when starting out and paying down the national debt.

I hope you have gained a fuller understanding of the federal pension system and Universal Basic Income, and hope you’ll join the fight to reform the massive institutionalized fraud of Social Security and Medicare.

[1]https://www.ssa.gov/history/ratios.html

[2]https://www.ssa.gov/policy/docs/ssb/v66n4/v66n4p37.html

[3]http://cis.org/Welfare-Use-Legal-Illegal-Immigrant-Households

[4]http://freebeacon.com/issues/illegal-immigrants-outnumber-unemployed-americans/

[5]http://www.nationmaster.com/country-info/profiles/Somalia/Crime

 

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