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Debt Relief – Insolvency – Bankruptcy Information » Insolvency » which president started the process of “borrowing” from the Social Security fund?

which president started the process of “borrowing” from the Social Security fund?

Leading to the threat of insolvency that allows nitwits like Rick Perry to call it a “Ponzi Scheme”

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5 Responses to "which president started the process of “borrowing” from the Social Security fund?"

  1. Uncle Pennybags says:
    FDR
  2. jaker says:
    It was Congress, not the president.
  3. bigvossman says:
    The fund is placed in special GAS Treasury bonds only the government can borrow from. It generally earns around 4% interest, and has ALWAYS been repaid, just like all Treasury bonds have. If they were not paid, investors would not be shoving in line eager to buy them.

    Somebody ask Rick Perry, would you prefer we invest the trust fund in private investment and risk everyone’s contributions? Or should we put $4.6 trillion under the mattress and draw no interest on it.

    http://www.ssa.gov/oact/progdata/fundFAQ.html

  4. Arthur says:
    the money in the social security trust fund was moved to the general fund to hide a deficit created by the “guns and butter” policy during the Vietnam era when Lyndon Johnson was president.
  5. Tim says:
    A democrat named FDR.

    Per USLegal.com “Ponzi schemes are named after Charles Ponzi, who ran a postage stamp speculation scheme in 1919-1920. A Ponzi scheme is an investment scheme in which returns are paid to earlier investors, entirely out of money paid into the scheme by newer investors. Ponzi schemes are similar to pyramid schemes, except that they are operated by a central company or person, who may or may not be making other false claims about how the money is being invested, and where the returns are coming from. Ponzi schemes operate on a “rob-Peter-to-pay-Paul” principle, as money from new investors is used to pay off earlier investors until the whole scheme collapses.”
    Given this, does Social Security meet the definition of a Ponzi scheme? Here is the fact pattern
    There is no ‘lock box’. Social security is part of general revenues. They are heavily borrowed against by the government and deficits are paid out of general revenues.
    Current payments are used to pay current benefits. The money paid into SS is not kept in an individual account like a 401k or bank account. It goes out as fast (or faster) than it comes in. As long as the number of people paying into the system far exceeds the number of people receiving benefits, all is well. When the system was first instituted, there were about 6 workers per beneficiary. Now it is more like 2 to 1.
    SS was originally proposed as an insurance plan for the elderly during the depression. That is what the government told us, anyway. They did, however, change their minds when the government was sued over it and explained to the Supreme Court that it was a tax and therefore fell under the government’s power.
    Given all this, I would conclude that yes, it is a Ponzi scheme.

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