The Social Security Ponzi Scheme

As an investor, I've always wondered why Social Security is such a problem. What's so difficult about managing this particular Trust Fund, and why is it so different from other investment accounts that pay out a constant stream of income? The private sector does it routinely with defined benefit pension plans and fixed annuities, so what's the big deal? Is Social Security failing because it hasn't been invested soundly, or is there some other reason?

The most obvious explanation is politics, but we're running out of time for finger pointing, and Social Security is solvable in a surprisingly painless manner. It will require a whole new approach that uses old ideas and institutions in ways that most of us have pretty much given up on. As hopeless as the Bush Administration's Nicotine Patch for Social Security would have been, it pointed in the right direction. Now don't hit DELETE when I refer to "privatization", or when I mention one of my own most hated financial products, the "annuity". Both are needed to permanently fix the Social Security mess, to get it away from people who are neither managers nor investment specialists, and to make the whole system work more economically. The purpose of this article is to get you to think about it... and to elect a hero with the guts to fix it. Unfortunately, Joe DiMaggio has left the building!

Are you surprised that there is no "Social Security Trust Fund"... no investments and no Investment Managers? This is a gigantic Government designed and controlled Ponzi scheme that has worked incredibly well in spite of congressional tinkering and prohibitively high cost. There was always a tax plan for funding the benefits, but never an Investment Plan. And as difficult as it is for me to admit, no sophisticated Investment Plan is really necessary. We just need a new (reduced) contribution plan, one that isn't designed to fund every politically sensitive entitlement that compromises itself down the aisle. We need a simplified benefit structure that supplements privately funded (untaxed) retirement programs. [Healthcare just has to be a separate issue, perhaps an actual (managed) Trust Fund, and certainly something that should not be funded by private citizens until there is meaningful tort reform in this country.] Pshew! Back to the point... We can eliminate all the unnecessary bells and whistles simply by mandating personalized benefit funding. Let the politicians deal with homeland security while the private sector deals with things financial.

After the repeal of the Social Security tax and implementation of mandated Individual Retirement Plan Contributions, the Social Security bureaucracy will retain several important functions: 1) Qualifying private sector companies and licensing them to provide Social Security Retirement Income Annuities (SSRIAs). Thousands of providers will be needed, but only, fixed income experienced, profitable companies need apply. 2) Developing a computerized system for participant/provider matching... inspired randomness is essential. 3) Proactive monitoring of compliance with the minimal rules, installation of fraud detection systems, and investigation of all violations by providers, participants, and retirees, 4) Keeping the plan sacred, simple, and principally unchanged by future legislation. The plan must be kept: simple and profitable for providers; painless and visible to participants; timely and comprehensible to retirees.

The SSRIA is a new and improved version of the ancient Deferred Fixed Annuity Contract... a boring but guaranteed retirement benefit vehicle, funded by both mandated and voluntary payroll deductions, with a whole bunch of new wrinkles that make it an ideal Social Security replacement program. For example, and unlike existing annuity contracts: 1) Participants will be allocated to "qualified SSRIA providers" so there will be no sales commissions, no business acquisition or retention costs, no advertising expenses, etc. 2) All SSRIA contracts (regardless of provider) will contain the same terms, interest guarantees, retirement benefit choices, and pre-retirement death benefits, thus eliminating any incentives for internal fraud and manipulation of statistics. 3) Qualified providers will establish separate subsidiaries to manage and control SSRIA operations and to assure that only high quality, income securities are used to fund future benefits. 4) All qualified providers will use the same mortality, investment earnings and expense assumptions, and all benefits will be fully guaranteed by the parent corporations.

The SSRIA is a supplemental retirement program, funded by a much smaller, yet flexible, payroll deduction, and it is designed to be the foundation of a retiree's total retirement package... a benefit floor. Participants will choose (annually, for the following year) to deposit from the required 2% up to a maximum 4% of their Pre-Tax Income to their personal SSRIA, a contract that will follow them everywhere, from employer to employer, throughout their working years. Before retirement, a death benefit equal to the full cash value of the contract will be paid to the designated beneficiary. At retirement, participants can elect either a Life Annuity or a Joint & 50% Survivor Annuity. No variable plans of any kind will ever be allowed; there will be no loan privileges, withdrawals, or dividends. Providers are expected to make a reasonable profit, which will ultimately be determined by their operating and investing abilities... hmmm, I smell capitalism.

Employer sponsored benefit programs and individual savings and investments are expected to make up the bulk of private retirement programs. The SSRIA will assure that everyone has something, but individual savings and retirement plans, both company sponsored and personally funded, will be encouraged by new IRS policy. No retirement income, regardless of source will be subject to income taxation! Neither employers nor self-employed persons will be required to make matching contributions of any kind to employee SSRIAs. However, they will be encouraged to use their improved cash flow to increase employment or to reduce prices, perhaps by a new system that will reduce their corporate income tax obligations as a reward for boosting the economy. Similarly, billions of dollars of discretionary spendable income will find its way back into the economy from consumers whose payroll deductions have been slashed deservedly.

Steve Selengut www.sancoservices.com www.valuestockbuylistprogram.com Professional Portfolio Management since 1979 Author of: "The Brainwashing of the American Investor: The Book that Wall Street Does Not Want YOU to Read", and "A Millionaire's Secret Investment Strategy"

Related Information of Interest:

Marching Along
1. In England, until the Gregorian calendar was adopted in 1752, March was considered what month of the calendar year?
A. First
B. Fourth
C. Eighth
D. Last

A. First
QQ: In England, until the Gregorian calendar was adopted in 1752, March was considered the first month with the legal year beginning on March 25.

2. What animal is honored on March 1?
A. Pig
B. Horse
C. Cow
D. Chicken

A. Pig
QQ: March 1 is National Pig Day. It was started by Texas art teacher Ellen Stanley in 1972 to honor and give thanks to our most intelligent domesticated creature.

3. Also known as St. David's Day, what country holds March 1 as its National Day?
A. Ireland
B. England
C. Wales
D. Scotland

C. Wales
QQ: March 1, St. David's Day, is the national day of Wales. St. David was the founder and first abbot-bishop of Menevia, now St. David's in Dyfed, South Wales. The day is commemorated by the wearing of daffodils or leeks. Both plants are traditionally regarded as national emblems.

4. What organ of the body is honored the third week in March?
A. Heart
B. Skin
C. Lungs
D. Brain

D. Brain
QQ: The third week of March is Brain Awareness Week in support of brain disease and research.

5. What favorite food is honored in March?
A. Soup
B. Eggs
C. Steak
D. Noodles

D. Noodles
QQ: As legend has it, noodles were first made by 13th century German bakers who fashioned dough into symbolic shapes, such as words, birds and stars. These "nudels" were then baked and served as bread. March national noodle month.

6. According to Roman mythology, Mars is the God of War. He was also regarded as what?
A. Father of Rome
B. Destroyer of Rome
C. Founder of Rome
D. Builder of Rome

A. Father of Rome
QQ: One of the most important Roman deities, Mars was regarded as the father of the Roman people because he was the father of Romulus, the legendary founder of Rome. Although his original nature and functions are obscure, Mars was identified by the Romans with the Greek god of war, Ares. The month of March was named for Mars.

7. The week of March 20-26 is designated to honor what childhood pastime?
A. Chewing Gum
B. Bubbles
C. Slinky
D. Yoyo

B. Bubbles
QQ: March 20 to 26, 2004, is "National Bubble Week," the week for kids of all ages to celebrate the fun and enchantment of bubbles. The first-ever Bubble Week was in 2000 and was initiated by Oddzon, makers of Koosh Bubbles. The event was created to herald the first day of spring -- the unspoken first day of the bubble-blowing season.

8. March has its own insect, the March ____. What is it?
A. Bee
B. Moth
C. Beetle
D. Fly

D. Fly
QQ: There are about 119,500 known species of flies and they make up the fourth largest insect order, after the beetles, butterflies and moths, and bees and wasps.

9. What piece of foul weather gear is honored in the month of March?
A. Raincoat
B. Galoshes
C. Rubber boots
D. Umbrella

D. Umbrella
QQ: March is national umbrella month As a shade from the sun, the umbrella is of great antiquity. It is only more recently we have come to see the umbrella as protection from rain.

10. What favorite snack food is honored in the month of March?
A. Corn chips
B. Popcorn
C. Peanuts
D. Cheese curds

C. Peanuts
QQ: March is National Peanut Month. National Peanut Month had its beginnings as National Peanut Week in 1941. It was expanded to a month-long celebration in 1974.

You can enjoy more trivia created by Deanna Mascle at A Trivia Break, The QuizQueen, and Trivial Topics. Submitted with Article Distributor.

Gossip: What People Say About It
We decided, at a reader’s request, to write about gossip and, along the way, to note what others have gossiped about it. We decided, at a reader’s request, to write about gossip and, along the way, to note what others have gossiped about it.

What might one say under the influence of a confessional potion when asked, “Why do you always talk about other people?”

We imagined the reply, “Apparently, because I have nothing much to say about myself.”

Before we turn to the little basket of quotes we picked for you, we can also pass along a couple of our own consolations. One, it’s a lot better to be interesting enough to be talked about than to be the interested party who’s doing the talking. Two, gossip’s empty gambits take place in a playground, actually, on a seesaw. The child who delights to babble sees you way up there – the higher the better – and thinks that by putting you down he or she will put himself or herself up. Tada!

Now, we turn to what others have gossiped about it. It appears, not surprisingly, that brilliance has enlivened the subject only rarely.

“The trouble with her is that she lacks the power of conversation but not the power of speech.” George Bernard Shaw

“I know that’s a secret, for it’s whispered everywhere.” William Congreve

“They come together like the Coroner’s Inquest, to sit upon the murdered reputations of the week.” Congreve

“I hate to spread rumors, but what else can you do with them?” Amanda Lear

“If you haven’t got anything good to say about anyone come and sit by me.” Alice Roosevelt Longworth

“She proceeds to dip her little fountain-pen filler into pots of oily venom and to squirt this mixture at all her friends.” Harold Nicolson

“I’m called away by particular business – but I leave my character behind me.” Richard Brinsley Sheridan

“Here is the whole set! A character dead at every word.” Same Sheridan

“There is only one thing in the world that is worse than being talked about, and that is not being talked about.” Oscar Wilde

“A professional athlete – of the tongue.” Aldous Huxley

Social sewage.” George Meredith

“Foul whisperings.” William Shakespeare (Sometimes referrred to in gossip as Billy Wigglestick)

Tom Attea, creator of Newslaugh.com, has had six shows produced Off-Broadway and has written comedy for TV. Critics have called his writing ""delightfully funny" and "witty" with "good, genuine laughs."

No Fun Na.
Not so long ago I wrote about the Da Vinci Code causing a big stink here in India. That bubble has just about burst and lo behold we have another film causing a stir. The film Fanaa (Destruction) has got the BJP (Bharatiya Janata Party) in Gujarat in a twist. Well it’s not exactly a problem with the film but with its main actor Aamir Khan.

You see Aamir Khan has recently had a stint at being a social activist. He made the mistake of speaking his mind in the world’s largest democracy. It all began with people protesting against raising the height of the Narmada Dam which we in India supposedly need to meet our insatiable demand for energy particularly in this case – electricity. The protestors are demanding proper rehabilitation for the thousands of people that have been displaced because of this mammoth project. Aamir Khan joined in to give their demands a louder voice. That did it.

The right wing ruling Hindu party in Gujarat the BJP has banned all products endorsed by the actor including Coca Cola and Toyota cars and also his latest film release Fanaa. This does not in anyway represent the will of the general public in the state nor does it make much sense. The movie was released a few days ago in the rest of the country and has got a good response.

When will our political parties realize that the people no longer get excited about these frenzied agitations, which lack any real depth and are done just for show. The losers in this case are only the people of Gujarat. They need to realize that speaking one’s mind on any issue facing the people of India is the fundamental right of every citizen of the country. We cannot censure people in society just because we don’t like what they say.

Fanaa is about the relationship between a blind girl and an undercover terrorist. It has nothing against the state or people of Gujarat. Why then should it be banned? It is mainstream cinema that will do well or not on its own strengths as a film. This entire furor is hype generated by two bit politicians mainly for their fifteen minutes of fame.

For all thosehot heads seeking a ban on an actor or any person for that matter, who uses his or her freedom of speech in our country today, may we remind them that maybe they are living in the wrong part of the world here. I would suggest mass migration to a much cooler locale say for instance North Korea.

Sasha Masand the founder of Indian Voice Overs is an award winning Television Producer who has been part of the Indian media industry for over twelve years.

Steel building advice for business
Steel framed buildings are one of mans modern day wonders. These pre-fabricated steel structured enable us to quickly and efficiently construct and finish a permanent strong metal framed structure in as little as a week. With today's tight schedules and financial constraints it is vital that steel and concrete structures can be created as fast as possible.

Pre-fabricated steel building kits are used for all kinds of purposes from farm buildings to factories and of course for human habitation. Because of the way these kits are designed it is now easier than ever for architects to design from pre-existing sets of steel building modules and add on's.

The basic steel framed building kits will consist of the frame components, Cement sections, insulation and construction fittings. Because steel frame structures are now rolled of the production line it is now easier to keep control of project costs as the contractors will to some degree have to work to the know schedules of previous building projects.

Most steel building manufactures will be able to put you in contact with contractors that are familiar with their design and kits and this works out well for both the customer and contractor. If good feedback is generated about the construction company then they will get more work. The more work they get using a manufacturers steel kits then the faster they become at building them.

Another great advantage of steel building kits is that because the different parts such as steel girders and the fixing components have already been manufactured the faster the kit can be shipped to where it is needed.

The design and strength of steel framed buildings is suited to all needs and terrains. From skyscrapers to remote military installations and in all kinds of climates, The all round qualities of steel buildings are ideally suited.

Steel and concrete building kits are obviously a purchase that your business or organization will not want to purchase without thoroughly checking out the vendors credentials.

The below are words of extreme wisdom when buying steel construction kits.

If you are indeed looking to purchase such a steel product then the best advice is to ask to be put in contact with a past customer of your potential supplier. Ask them what their experience was and secondly take into account the length of time a steel building supplier has been in business.

Xavier Savion is a construction industry expert in the area of steel buildings . For purchasing tips, visit: ftsteel.com