Is Social Security Disability a Ponzi Scheme? Have Seniors “Really Paid Their Own Way?” Social security disability scheme faces censures though it is primarily meant as a welfare program. This article examines the issues involved and the solutions put forth to handle the situation.
Though named after Charles Ponzi who earned his notorious reputation for indulging in fraudulent money-making in the 1920s, the “Ponzi scheme” has existed even before his time. Charles Ponzi issued bonds that paid back an unbelievable 50% interest in a matter of 45 days, or 100% profit in just 90 days. Ponzi used to take the money invested by his second set of investors to pay the first set of investor, and repeat this practice. How is SSD similar to a Ponzi scheme? The similarity is only superficial in that money collected from new workers is being used to pay the benefits for retired and disabled workers. It is to be noted that not only government, but private pension systems also use this “pay-as-you-go” system. The problem with federal programs such as Social Security is that though implemented with public interests in view, they may not be feasible for the long term, especially when the number people investing money continue to get http://www.mosmedicalrecordreview.com/ 18006702809
lower compared to the number of people to whom benefits are to be paid. Since the creation of this scheme, retirees and disabled have been receiving benefits that were much more than their investments. For the disabled, payment is made on the basis of a thorough medical record review. This is to ensure that the disabled beneficiary still meets the plan’s definition and is entitled to receive benefits. Payment of large amount of benefits for retirees/disabled has led to added financial burden on later generations. Every time Social Security expanded, the already retired paid no additional taxes, and those near retirement paid for a few more years. They received benefits, adding on to the burden to be carried by later generations. In 1960, the Disability and dependents’ benefits were added to Social Security, and Medicare was added in 1966. Medicare Part B expanded the benefits, wherein only a quarter was funded by recipients, and in Part D prescription drug benefit, only 1/8th was funded by beneficiaries. Social Security was signed into law in 1935 by Franklin Roosevelt at a time when the average life expectancy was 61.7 years while the Social Security retirement age was 65 (i.e. 3.3 years later.) According to the U.S. Centers for Disease Control and Prevention’s National Center for Health statistics, the average life expectancy for Americans has increased from 78.6 years in 2009 to 78.7 in 2010. However, the Social Security eligibility age continues to be the same. This is the main reason for the impracticality of the Social Security program. Going by Roosevelt’s reasoning, the Social Security eligibility age http://www.mosmedicalrecordreview.com/ 18006702809
should be raised from age 62, the common age people start receiving SS benefits. According to a report in cnsnews.com that highlights new data released by the Social Security Administration trustees, over the last five years the number of people receiving disability benefits has phenomenally increased. Consequently, the surplus in that fund has been reduced from $216 billion in 2008 to little more than $ 100 billion in 2013. In January 2009 there were 7.4 million beneficiaries while the number has gone up to nearly nine million in October 2013. In addition, there are another 2 million spouses and children of disabled employees who are receiving benefits. Undoubtedly, it’s high time the concerned authorities took matters in hand, held discussions and adopted constructive measures to change the Social Security system. Amy Ridenour in her write-up in GazetteXtra addresses this major concern regarding Social Security benefits and suggests some remedial measures. Social security eligibility age should ideally be raised to 70 or higher; the concept that employees should be saving money to retire need to be revived; younger workers should be allowed to invest their payroll taxes in traditional, regulated investments that grow over the years; and full benefits should be assured to people retiring or about to retire. Posted by MOS Medical Record Review Company http://www.mosmedicalrecordreview.com/
Published on Dec 24, 2013
Social security disability scheme faces censures though it is primarily meant as a welfare program. This article examines the issues involve...