What is Social Security?

[RVonse]

I always thought that social security was a federal program put in place by FDR to ensure financial security of the elderly. But I have recently found out that many states are purposely ordering more child support in order to secure more social security funding for their state governments. Its called the Social Security Act Title IV-D Program. https://nationalparentsorganization...nd-the-social-security-act-title-iv-d-program

https://www.ssa.gov/OP_Home/ssact/title04/0458.htm

So in other words what this means is that your FICA payments withheld by your employer are being paid out to another state for an entirely different purpose than employment security! What better way can there be to bankrupt a government program than to rob funds for other purposes? And even more perverse is the fact that that state does not even have to use the money it gets from the federal government for children. They can use these funds for anything they choose. Its no wonder social security is (or will) be in trouble if they are giving it out to any state for any reason!

Furthermore, there is another huge problem with this. Attorney's, private and public child support collection agencies will blither on and on about how this is all "for the children" while they keep making a bigger mess generation after generation. This is the same government of fatherhood.gov and they are paying the states to bust up families and restrict most often the fathers parenting time. They are frequently ordering child support for reasons when it should not even be ordered. Take this situation for example: http://www.cnn.com/2014/01/23/justice/kansas-sperm-donation/index.html

Also consider that the court trustee regularly inserts themselves directly into cases attempting to maximize child support payments which in large part means minimizing most often to fathers parenting time. You almost cannot get divorced with children and not have child support ordered, even when the parents are in full agreement. The state makes too much money off the program to allow that. Almost all the State agencies brag often about how many new child support orders were able to be entered in any given month or year. All of this being done because the states want more federal money taken from money coming from FICA withholding taxes.

To me it is a fraud for all the people paying FICA taxes who think their money is meant to support the elderly. Seems like the perfect case for a class action lawsuit against the federal government for miss appropriation of funds! But there is probably some kind of sovereign immunity law that prevents anyone from suing the federal government.No matter what your position is with feminism or child support you should be against this IMO. Because social security is supposed to be meant to take care of old people and that will not happen if the funds get raided for other purposes.

 

[Loren Pechtel]

Yikes! I knew child support enforcement was corrupted but I didn't realize how badly the system was messed up.

 

[untermensche]

Social Security is an inter-generational insurance program.

There were flaws in it though.

It was assumed that wages would rise as wealth rose.

But in the US wages have stagnated for the past 50 years. While at the same time corporate profits and wealth in a tiny minority have risen greatly.

This puts less money into Social Security which is just an insurance program and can be used for anything.

 

[RVonse]

Yikes! I knew child support enforcement was corrupted but I didn't realize how badly the system was messed up.

And after learning more about this I feel that I owe the people of color a sincere apology. .... You cannot do this to people one generation after another leaving kids to be raised without dad and expect them not to end up on drugs, in jail, or blocking the damn highway like a bunch of idiots..

 

[TV and credit cards]

How shall we define child support? If two incomes are contributing to a single household in which the child lives and the parents separate, untangling their income, should it be expected that the child retain that same standard of living to the best of both parents abilities? And in support of this, shall the federal government assist states in ensuring this practice? I think so.

If you do support the above, what then? In the interest of maintaining the purity of the Social Security Administration, should the federal government separate all programs that might use our FICA for purposes other than supporting the elderly? Do we place these programs under other government agencies, get rid of them, or create individual bureaucracies for each?

If there are issues with states, then those issues should be addressed. You seem to be pulling anecdotes to support either separating child support enforcement from the SSA, creating another bureaucracy or getting rid of child support enforcement at the federal level and hopping the states can do so on their own. I don't know. You present a problem. Do you have a solution?

But first off: Define "child support". What should that consist of and to what extent should government ensure the support is being used appropriately for the child?

 

[SimpleDon]

Social Security is an inter-generational insurance program.

There were flaws in it though.

It was assumed that wages would rise as wealth rose.

But in the US wages have stagnated for the past 50 years. While at the same time corporate profits and wealth in a tiny minority have risen greatly.

This puts less money into Social Security which is just an insurance program and can be used for anything.

It was also assumed that the population of workers would keep growing. Wages times number of workers times equals the tax base for Social Security in a year. (Although in the "Europe submits" thread a few people insist that the number of the workers doesn't matter, that everyone can just work more years before they retire.)

This points out the basic lie that has been told about Social Security since it was passed, that the money that you pay into Social Security is put in a bank for your retirement. It isn't of course, the total amount of revenue amount of revenue that the federal government receives is spent in that year, including Social Security Taxes.

Both parties have taken advantage of the lie to advance their agenda. This provision was put into take advantage of the "surplus" of Social Security taxes over what was being paid out in benefits, by the Democrats, to answer calls to reduce welfare payments, calls made by the Republicans and the conservative Democrats, who became Republicans. I don't have any knowledge whether or not it achieve any reduction in welfare payments, if I had to guess it would be no. But it certainly has transferred a lot of money to the states, so that it is now untouchable.

 

[untermensche]

No lies have been told except by those that want to destroy Social Security.

If people don't know what they are putting money towards just add it to the incredible ignorance displayed byAmericans.

 

[jonatha]

It was also assumed that the population of workers would keep growing.

I have read that if you examine the original actuarial calculations for Social Security they are remarkably accurate. What was not taken into account is various sweeteners Congress has added over the years.

This points out the basic lie that has been told about Social Security since it was passed, that the money that you pay into Social Security is put in a bank for your retirement.

Dunno who's been telling that lie, but anyone who's paid any attention at all to the facts (i.e., both of us...) knows that until the "lockbox" reforms under Clinton it was pretty much strictly pay-as-you-go.

Of course I have relatives and parents of friends who are convinced the world's largest mattress is sitting in the middle of Nevada, stuffed with FICA receipts...

 

[RVonse]

Do you have a solution?

Obvious solutions of the top of my head.

1. To begin, we restrict social security to support for the elderly and welfare to support children. That way, FICA is used for what it should be and welfare is used for what it should be. Call a spade a spade so that we at least know how much and where money is going. What will they do next? Does the federal government start pulling money out of FICA to pay Lockheed for a military contract? What really is the difference?

2. Stop creating a federal incentive for the states to collect child support. This is a direct invitation for corruption. If you want to help children, thats fine but don't tie it to child support. And why should this amount become more if the child support order is more? On the face of it, this makes no logical sense to give the state more money if an order for more child support is issued. If anything, you would want to help children without any means of support.

3. In case you simply can not get rid of these corrupt programs. At least make the states spend the money on children! Right now they can spend it on anything they want. They can spend this FICA money on sprinkler systems for the governors mansion if they want.

 

[RVonse]

This points out the basic lie that has been told about Social Security since it was passed, that the money that you pay into Social Security is put in a bank for your retirement.

That's not what I have always thought. I always thought it was about a pension program for workers but mandatory on the federal level. That young workers would be supporting retired workers with their holdings being paid to support retirees in a similar manner as it is designed with the private run pensions. Yes, at times there will be more or less retirees and more or less workers but that difference to be made up by a savings account.

And as FDR designed it, I think it worked and should still work.

But if you borrow money from the fund for other purposes that's not going to work. And if you actually pay money from FICA tax for other purposes, that's really not going to work.

 

[jonatha]

This points out the basic lie that has been told about Social Security since it was passed, that the money that you pay into Social Security is put in a bank for your retirement.

That's not what I have always thought. I always thought it was about a pension program for workers but mandatory on the federal level. That young workers would be supporting retired workers with their holdings being paid to support retirees in a similar manner as it is designed with the private run pensions.

That's not how privately-run pensions work. They have a pool of assets accumulated over the working life of the retiree (from some combination of employer contributions, employee contributions, and earnings) sufficient to pay the retiree's benefits.

And if you actually pay money from FICA tax for other purposes, that's really not going to work.

Once Social Security started collecting more than it paid out, it had to invest the resulting "pool of assets" somewhere. By Congressional decree, it chose the safest, most conservative investment available - US Government bonds - which, of course, are also held in quantity by most if not all privately-run pensions.

 

[RVonse]

How shall we define child support?

The point is that child support should have nothing at all to do with retirement security. Why are people who have never been married or having kids required to pay FICA tax to states to support a child support incentive program? For that matter, why are people who are successfully married with kids required to pay FICA tax to states to support their child support incentive program? One has nothing to do with the other.

Furthermore, its actually causing more strife with children who would be able to see more of their fathers but can't. Because the state has so much incentive for families to become broken, they cause problems that shouldn't be problems with divorce.

 

[RVonse]

That's not how privately-run pensions work. They have a pool of assets accumulated over the working life of the retiree (from some combination of employer contributions, employee contributions, and earnings) sufficient to pay the retiree's benefits.

I disagree. And I should know because I am currently drawing pensions by 2 different corporations right now. And I am also part of a pension program for a 3rd corporation (which I have not retired from yet). None of those pension programs could continue to pay pensions without new employees paying into the fund. Those programs could continue for a few years maybe but would become insolvent rapidly without new workers putting into the program. They barely remain solvent even with the payments of the new workers into the program.

 

[RVonse]

That's not how privately-run pensions work. They have a pool of assets accumulated over the working life of the retiree (from some combination of employer contributions, employee contributions, and earnings) sufficient to pay the retiree's benefits.

And if you actually pay money from FICA tax for other purposes, that's really not going to work.

Once Social Security started collecting more than it paid out, it had to invest the resulting "pool of assets" somewhere. By Congressional decree, it chose the safest, most conservative investment available - US Government bonds - which, of course, are also held in quantity by most if not all privately-run pensions.

Yes. But the big difference (as we all know) is that the bonds held by the privately run pensions are still valid obligations that can be counted on to be paid upon demand.

 

[Loren Pechtel]

2. Stop creating a federal incentive for the states to collect child support. This is a direct invitation for corruption. If you want to help children, thats fine but don't tie it to child support. And why should this amount become more if the child support order is more? On the face of it, this makes no logical sense to give the state more money if an order for more child support is issued. If anything, you would want to help children without any means of support.

Yup. When you provide a big financial incentive for something you get more of it whether it's proper or not.

Note, however, that the article went too far in the other direction. Equal parenting is generally not possible in a divorce situation because the kids need to go to a school. Unless both parents live in the same school district you can not reasonably share school time parenting.

- - - Updated - - -

Yikes! I knew child support enforcement was corrupted but I didn't realize how badly the system was messed up.

And after learning more about this I feel that I owe the people of color a sincere apology. .... You cannot do this to people one generation after another leaving kids to be raised without dad and expect them not to end up on drugs, in jail, or blocking the damn highway like a bunch of idiots..

So many of these were cases where they were never married in the first place. I have little sympathy in such cases.

 

[laughing dog]

Quite a bit of the OP is based on a misperception. FICA (Federal Insurance Contributions Act) tax is not solely for retirement. Social Security is the old age, survivors and disability insurance (OASDI and is a major part of FICA, but FICA includes Medicare. So, FICA contributions where never meant to solely provide for the elderly.

Now, whether it is a good idea to use FICA funds to reward states for improving the collection of child support is a different matter. However, as jonatha points out, when the FICA contributions exceed outlays, the surplus is used to purchase gov’t bonds (i.e. fund current federal gov’t spending). When FICA outlays exceed revenues, bonds are sold to make up the difference.

So, IMO, the federal source of these incentive payments makes very little operational difference. However, it does seem a poor idea from a PR point of view. Social Security has enough problems with public misperceptions and ignorance without adding to it with these types of gimmicks.

 

[jonatha]

That's not how privately-run pensions work. They have a pool of assets accumulated over the working life of the retiree (from some combination of employer contributions, employee contributions, and earnings) sufficient to pay the retiree's benefits.

I disagree. And I should know because I am currently drawing pensions by 2 different corporations right now. And I am also part of a pension program for a 3rd corporation (which I have not retired from yet). None of those pension programs could continue to pay pensions without new employees paying into the fund. Those programs could continue for a few years maybe but would become insolvent rapidly without new workers putting into the program. They barely remain solvent even with the payments of the new workers into the program.

Yes, pensions can be underfunded.

 

[coloradoatheist]

This points out the basic lie that has been told about Social Security since it was passed, that the money that you pay into Social Security is put in a bank for your retirement.

That's not what I have always thought. I always thought it was about a pension program for workers but mandatory on the federal level. That young workers would be supporting retired workers with their holdings being paid to support retirees in a similar manner as it is designed with the private run pensions. Yes, at times there will be more or less retirees and more or less workers but that difference to be made up by a savings account.

And as FDR designed it, I think it worked and should still work.

But if you borrow money from the fund for other purposes that's not going to work. And if you actually pay money from FICA tax for other purposes, that's really not going to work.

The issue is the accounting that is used between the different taxes and programs out there. We overtax FICA at this point, and undertax the general fund. So the government decided to use the extra from SS to pay for the other programs and then write IOUs back to SS. Maybe slightly decrease the SS taxes and increase the general fund tax rates to make up the difference.

 

[Horatio Parker]

This points out the basic lie that has been told about Social Security since it was passed, that the money that you pay into Social Security is put in a bank for your retirement.

That's not what I have always thought. I always thought it was about a pension program for workers but mandatory on the federal level. That young workers would be supporting retired workers with their holdings being paid to support retirees in a similar manner as it is designed with the private run pensions. Yes, at times there will be more or less retirees and more or less workers but that difference to be made up by a savings account.

And as FDR designed it, I think it worked and should still work.

But if you borrow money from the fund for other purposes that's not going to work. And if you actually pay money from FICA tax for other purposes, that's really not going to work.

The issue is the accounting that is used between the different taxes and programs out there. We overtax FICA at this point, and undertax the general fund. So the government decided to use the extra from SS to pay for the other programs and then write IOUs back to SS. Maybe slightly decrease the SS taxes and increase the general fund tax rates to make up the difference.

The trust fund served as a subsidy for higher incomes. Because the trust fund surplus was loaned to the general fund, taxes could be lower. Because FICA is regressive, high earners win.

 

[coloradoatheist]

The issue is the accounting that is used between the different taxes and programs out there. We overtax FICA at this point, and undertax the general fund. So the government decided to use the extra from SS to pay for the other programs and then write IOUs back to SS. Maybe slightly decrease the SS taxes and increase the general fund tax rates to make up the difference.

The trust fund served as a subsidy for higher incomes. Because the trust fund surplus was loaned to the general fund, taxes could be lower. Because FICA is regressive, high earners win.

You can make the general fund taxes more regressive to make just the change of which fund the money is coming into to be used. It's just an accounting purpose. But the government can do what what no other entity does when in it comes to it's IOU funds.