Re: {Political_Views} Get angry and pass this on!: I Paid -- Didn't You?

I read it and sent the reply to my older sister who forwarded it to me. I told her the same thing about the government cannot run out of money and such. Heck according to the math I should be getting more than double of what I am.

----- Original Message -----

From: Salty Jamie

To: political_views@googlegroups.com

Sent: Tuesday, September 27, 2011 2:38 PM

Subject: Re: {Political_Views} Get angry and pass this on!: I Paid -- Didn't You?

I agree with the sentiment, however the math is all askew. 

 

For example, your contribution to Medicare 1.635% of the 7.635% that comes off of your check, meaning that you contributed only 6% to FICA (Social Security) as well as your employer did for a total of 12% not the 15% touted in the email. 

 

Secondly if you worked from the age of 18 until 65 that would mean that you worked 47 years.  If you averaged $30k a year for 47 years and paid into FICA at 12% then you would have contributed $169,200.  Now, even if you worked the 49 years touted in the email then your total contribution(s)  would have amounted to $176,400 and not the "close to $220,500" stated in the email. 

 

Thirdly then 12% of $30,000 is equal to $3,600 that was contributed in your name to FICA every year for the 49 years.  Fourthly, by my calculations - and I certainly could have made a mistake, however by my calculations at a simple 5% return compounded then the $176,400 would have grown to $724,905 and change and not the nearly $900,000 touted in the email. 

 

Fifthly drawing a mere 3% yearly would yeild you $21,747 and change.  Or about $5,000 less a year than the email stated.  Still, $22,000 a year is nothing to sneeze at.  Moreover even if the interest was no longer paid on your $725,000 it would last you over 33 years (again only withdrawing a mere 3% of the principal every year).  However if a 5% per year interest were to continue to be paid and you withdrew only 3% per year then the $725,000 principal would continue to grow.

 

Sixthly the author does not make it clear that the annuity mentioned that returns a mere 4% - ($725,000 x .04 = $29,000  $29,000/12 = $2,416.67 per month and not the $2,976.40 per month touted in the by the emails' author) - the author does not make it clear that you would need the $725,000 to buy that annuity.  They don't mention that they won't let you buy it on time or as a lay away plan of $3,600 a year.  PLUS if it's just you and not you + your employer you would only put away $1,800 a year and NOT the $3,600 a year that you would under FICA.  AND under the Federal Insurance Contributions Act (FICA - AKA Social Security) there is a disability component that would no longer be there.  You would have to buy that insurance seperately out of the $1,800 a year.  So all in all you would not have $725,000 to invest in a 4% annuity that would give you the $21,747 a year that you'd get from Social Security. 

 

 

Seventhly: FICA - SOCIAL SECURITY is NOT  a PONZI scheme.  Ponzis' scheme lasted only for one year and not the 70 + years that FICA has.  Ponzi skimmed 50% of the take off the top.  FICA skims nothing off the top.  Ponzis' scheme went broke.  Social Security is solvent.  It can pay everyone in the system at 100% until 2045 and then at 80% if nothing is done about it before hand.  The only thing that need be done is to get the millionaires and billionaires to pay into it like everyone else.  Right now if you earn $150,000 a year you stop paying into FICA after $105,000.  So if there were no "cap" then all earnings would be assessed for the 12% FICA. 

 

Remember it's not just the wage earner who doesn't pay 6% on the $45,000 but their employers' 6% share doesn't get paid either.  That folks is an additional $5,400 per year that doesn't get into FICA. 

 

Now 'tis true that Social Secuity is NOT an entitlement.  You (and I) paid into the system.  The baby boomers twice - once for themselves and once for their parents.  FICA is set to be reduced from the current rate of 6% sometime near 2050 when the vast majority of the baby boomers have passed on and the need for all that money won't be there.

 

The Federal Goverment didn't borrow the Social Security money.  The Social Security Administration needs to grow the fund so it buys securities such as Treasury Bills, and Government Bonds.  It does NOT invest in that gambling casino know as Wall Street.  It does not invest in brokerage houses such as Leahman Brothers, or in entities like ENRON. It does not invest in places that can go belly up and LOSE your money.  So the author of the email is correct on this one point.  Social Security is not an ENTITLEMENT, nor is it CHARITY nor a HANDOUT! 

 

The rest of the authors' email is pure rant.  The government cannot run out of money.  It has plenty of assets to sell to cover it's debts.  Governments all over the world sell bonds and such.  They guarantee that they will be paid off.  Even if the U.S. government has to turn the Interstate Highway System into a toll road to earn money the Federal government cannot go broke.  All it takes is for the Republicans to stop playing games with the lives of ordinary citizens.  Ordinary citizens who may dream of one day being the next Bill Gates but in all likely hood will remain Bill the plumber.  Congress - both parties - need to pass laws that would reduce the influence of money on elections.  Pass laws that raise taxes on millionaires and billionaires at least to the Clinton era level.  The Republicans need to stop their demogogery and put the needs of the nation and ALL of it's citizens first and foremost.

 

 

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