The main problem I have with the article is that it is phrasing it as a "handout" and the payouts coming as "courtesy of the American taxpayer." In reality, they are collecting money that they put in, so the article is making sensationalist claims that aren't factual.
According to the institute’s data, a two-earner couple receiving an average wage — $44,600 per spouse in 2012 dollars — and turning 65 in 2010 would have paid $722,000 into Social Security and Medicare and can be expected to take out $966,000 in benefits. So, this couple will be paid about one-third more in benefits than they paid in taxes.
Some types of families did much better than average. A couple with only one spouse working (and receiving the same average wage) would have paid in $361,000 if they turned 65 in 2010, but can expect to get back $854,000 — more than double what they paid in. In 1980, this same 65-year-old couple would have received five times more than what they paid in, while in 1960, such a couple would have ended up with 14 times what they put in.
Such findings suggest that, even allowing for inflation and investment gains, many seniors will receive much more in benefits than what they paid in.
Its also compulsory. I can't opt out and as you noted, the returns are shrinking drastically. It also passed as a savings program regardless of the horrible bookkeeping that the government is doing to keep an crappy system afloat. In fact, they have told us for 50+ years that its perfectly sustainable while plundering the institution to live beyond our means in other areas.
As for how its used by retirees today and in the past, would anyone sell stock that is paying insane an unsustainable dividends? Would you blame the investor or the company? Even if its compulsory to buy?
You absolutely can opt out by choosing to exclude employers that are either mandated, or who have chosen despite not being mandated, to participate in SS. Or by choosing to live by some means other than wage-labor (if you make all your income from capital investments, you have successfully opted out of SS.) No one is coercing you to the contrary (well, except the coercion to wage-labor that affects most of the population under capitalism and which has not generally been eliminated in modern mixed economies; but even there there are some wage-labor options outside of the Social Security mandate.)
Opting out and not participating in a wage-base economy are absolutely NOT the same thing. Opting out implies a simple choice. This is not a choice, this is either effectively be fantastically wealthy (and live off capital investments) or be fantastically poor (and live off welfare). Since the former isn't really a choice, you get to either opt-out of FICA, or opt-in to being destitute.
> Opting out and not participating in a wage-base economy are absolutely NOT the same thing.
To the extent capitalism isn't slavery they absolutely are.
We can, of course, debate the extent to which capitalism is or isn't slavery.
Of course, again, you can still opt-out of Social Security within the wage-labor economy, it just narrows your choices of acceptable employment opportunities. [0]
I would take the other side of that bet. I don't even need to work out the exact math:
You pay me $722,000 over the next 50 years, then from years 51-??? (70? 80?) I pay you the equivalent of $966,000.
I would not have to get a very high rate of return to end up better than that. Eyeballing it, the payments from the first 10 years alone, at a return of around 4% or 5%, would cover all of my outlays at the end. That's a sweet deal.
It looks like they accounted for inflation somewhat ("...in 2012 dollars"), but even returns modestly beating inflation would turn out a much bigger winner.
The bigger problem is that the govt. is not investing that money like I would if I took the bet.
All income groups have historically collect more than they contribute in Social Security (wage-indexing of contributions to the point of retirement combined with average lifespans has driven that, though stagnant wages in the last several decades make that wage indexing less significant than it used to be.)
