A SOCIAL SECURITY FAIRY TALE...
I have been trying to come up with a story that the people on the street of all ages could understand, allowing them to see the facade that we call Social Security. Read my fairy tale and let me know if you understand that this is story analogous to our Social Security System.
"A Social Security Fairy Tale"
"Let's pretend there is a world with a Grandfather 75 years old, a Father 55 years old, and a Grandson 35 years old and a GreatGrandson 15 years old.
10 years ago they got together and decided to supply social security to the Grandfather. So they took 12.4% of the income of the Father and Grandson and gave it to the Grandfather. But to make it easier to accept for all the families, they put it into the "Social Security Trust Fund" which gave them an IOU and then transferred the money to the Grandfather.
For 10 years all has been rosy: Grandfather, although retired, receives supplemental income from the "Social Security Trust Fund;" the Father and Grandson believe the "Social Security Trust Fund" owes them their 12.4% plus interest after their retirement; and the GreatGrandson is looking forward to contributing to the Social Security Trust Fund when his working career starts to build up this "nestegg" for himself, as his Father (Grandson) and Grandfather (Father) have taught him.
Fast forward 10 years: now the Father is to receive his 12.4%, but the IOU's have nothing to back them up! There is no money! However, if Grandson and GreatGrandson keep paying their 12.4% he can get what Grandfather received - As Long As Grandfather Is Either Gone Or We Zero His Social Security! Or (1) THE SOCIAL SECURITY MUST BE CUT SO GRANDFATHER AND FATHER CAN CONTINUE TO RECEIVE SOMETHING (2)THE INPUTS TO THE SOCIAL SECURITY TRUST FUND (TAXES) MUST BE INCREASED!
Fast forward 10 years: Grandfather is alive at 95! Father is still retired and may live longer than Grandfather! But Grandson has a problem: since GreatGrandson has had no progeny, and Grandson will be retiring in 10 years, he is beginning to wonder where his retirement will come from. Certainly Father and Grandson will be alive when Grandson retires and there will only be GreatGrandson paying into the "Social Security Trust Fund."
HE THINKS THERE IS A CRISIS!"
I believe GreatGrandson would be happy to start a private account with 6.2% of his "Social Security Trust Fund" money, since he see's that the demographics of his situation means he will have no retirement income when he reaches 65!
Let me know if you can follow the logic of the fairy tale. Does it help to understand where we are with our Social Security? Can people understand this parable?
WORD FOR THE DAY: detritus
HINT: Your should always keep a dictionary at hand to look up these words!
P.S.: Curt, comment on this and I will resume my plan on Social Security!
"A Social Security Fairy Tale"
"Let's pretend there is a world with a Grandfather 75 years old, a Father 55 years old, and a Grandson 35 years old and a GreatGrandson 15 years old.
10 years ago they got together and decided to supply social security to the Grandfather. So they took 12.4% of the income of the Father and Grandson and gave it to the Grandfather. But to make it easier to accept for all the families, they put it into the "Social Security Trust Fund" which gave them an IOU and then transferred the money to the Grandfather.
For 10 years all has been rosy: Grandfather, although retired, receives supplemental income from the "Social Security Trust Fund;" the Father and Grandson believe the "Social Security Trust Fund" owes them their 12.4% plus interest after their retirement; and the GreatGrandson is looking forward to contributing to the Social Security Trust Fund when his working career starts to build up this "nestegg" for himself, as his Father (Grandson) and Grandfather (Father) have taught him.
Fast forward 10 years: now the Father is to receive his 12.4%, but the IOU's have nothing to back them up! There is no money! However, if Grandson and GreatGrandson keep paying their 12.4% he can get what Grandfather received - As Long As Grandfather Is Either Gone Or We Zero His Social Security! Or (1) THE SOCIAL SECURITY MUST BE CUT SO GRANDFATHER AND FATHER CAN CONTINUE TO RECEIVE SOMETHING (2)THE INPUTS TO THE SOCIAL SECURITY TRUST FUND (TAXES) MUST BE INCREASED!
Fast forward 10 years: Grandfather is alive at 95! Father is still retired and may live longer than Grandfather! But Grandson has a problem: since GreatGrandson has had no progeny, and Grandson will be retiring in 10 years, he is beginning to wonder where his retirement will come from. Certainly Father and Grandson will be alive when Grandson retires and there will only be GreatGrandson paying into the "Social Security Trust Fund."
HE THINKS THERE IS A CRISIS!"
I believe GreatGrandson would be happy to start a private account with 6.2% of his "Social Security Trust Fund" money, since he see's that the demographics of his situation means he will have no retirement income when he reaches 65!
Let me know if you can follow the logic of the fairy tale. Does it help to understand where we are with our Social Security? Can people understand this parable?
WORD FOR THE DAY: detritus
HINT: Your should always keep a dictionary at hand to look up these words!
P.S.: Curt, comment on this and I will resume my plan on Social Security!
posted by Jim | 10:46 AM
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