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Comment by tomcam | Hacker News Reader

I am trying to understand this. What were the mini tens of thousands of dollars I paid to the federal government over a period of 40 years in the form of Social Security taxes then?

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They were paid to other retirees at the time. Some excess dollars were loaned to the government for general spending, which put Treasury bonds into the "social security trust fund." You in turn received credit that entitles you to receive similar payments when you retire, paid for by then-working taxpayers and by repayment of those bonds (which also comes from tax revenue.) As other posters mention, the democratically-elected government could change the law so you aren't paid those benefits: if that bothers you, you should avoid voting for politicians that want to change the arrangement.

Just so you know, I would be happy to end the arrangement, even though it would mean losing my Social Security benefits, which I should come into soon. I think it’s a terrible system. I am just having trouble understanding your terminology.

His terminology makes sense and it hits directly to the core of the problem: It's a ponzi scheme. These people were not saving into "retirements". They were giving their money, freely, for other people in the expectation that the next generation will do the same.

Agree completely that it’s a Ponzi scheme

The same thing is true of your investment account. When you buy bonds you're giving money to a company or the US Treasury who then spend it. That money is gone. You're assuming the borrower will choose pay you back from some future revenue stream. When you buy into a stock IPO you're betting that the company will pay you dividends from a future revenue stream (or do related things that make the stock perceived as valuable.) In the case of Social Security that future revenue stream is taxes drawn from the US taxpayer. None of this is a Ponzi scheme.

Social security has always been simply a means-tested welfare program like any other we have in the US. The tax to to support it the same thing - just an income tax to balance out the budget.

I wouldn't describe myself has having "paid in" to SNAP, or disaster relief funds, etc. Just as I wouldn't describe myself as having "paid in" to social security. I simply paid an income tax at the time like any other. If I'm lucky, when I'm in need some other poor sap will be paying it forward as well.

Social Security taxes are just ordinary income taxes, no different than the rest of the income taxes you may have paid. It does not entitle you to anything.

This was settled by the US Supreme Court in 1960.

It's a tax. That money is spent and gone. You no longer have any claim on it. If you live long enough, you may get to claim tax money paid by other workers, but that has nothing to do with what you were taxed.

You don't have a "Social Security" balance that you can eventually withdraw from in retirement. SS taxes just go into the general government budget, and the future retirement benefits they are theoretically associated with can be modified or rescinded at any moment. The odds of any 20s-30s-year-old--who is currently contributing funds to the Social Security scheme--eventually receiving Social Security checks to the tune of those that boomers are receiving today is virtually zero. It is simply a fiscal impossibility.

They were just that, a tax to keep the government from defaulting.

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