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Monday, November 16, 2009

There's No Inflation!

This article on MSN was amusing. Hooray! Inflation is zero!

The Social Security cost of living adjustment for 2009 is zero. The adjustment is based on the CPI. The CPI is much less than true inflation.

The price of actual goods and services is rising. For example, a 1 gallon container of apple cider is $1 more than a year ago, an increase from $4 to $5, 25% inflation. To be completely scientific, I should track every single purchase. It's simpler to just look at the price of gold, which is a very good approximation of true inflation.

There are no tangible assets in the Social Security Trust Fund. The wealth collected via taxes and put in the Social Security Trust Fund was already spent by State parasites. All there is in the Social Security Trust Fund is a stack of papers.

Social Security is a Ponzi scam. Payouts are paid by current workers via taxes. If any private insurance business operated that way, State enforcers should/would shut them down for fraud. State parasites follow different accounting rules than for other businesses.

Even for current retirees, Social Security is a ripoff. They earn an actual return of a couple percent on their "investment", even though current workers are robbed to pay their benefit. Current retirees would have been better off investing that money on their own, rather than investing in Social Security. It's wrong to consider Social Security payments as an investment. It's a tax.

A State parasite says "Without the State, people would not save for retirement. Therefore, the State should force them to save!" I pay 50%+ of my income in direct taxes, plus more via indirect hidden taxes. That leaves very little for investment. The savings I do have are stolen via inflation, unless I invest in physical gold and silver.

The fact that there's the illusion of Social Security means that people don't save. They assume that Social Security checks would be enough. The fact that the State steals people's incomes and people's savings provides very little incentive for saving.

If I didn't have to pay 50%+ of my income in taxes, I'd have enough wealth to pay to take care of my parents, start a business, and save myself.

Social Security is a massive profit center for State parasites. In every year of its existence, Social Security taxes collected have exceeded benefits paid. This stolen wealth isn't saved. It's immediately spent by parasites.

Social Security is politically untouchable. Why? Do politicians feel bad about cheating millions of people? Of course not. Is reform politically infeasible? If candidates from both parties insisted on reform, then voters would be SOL. It's the same way that voters who want freedom are cheated by the current political monopoly.

Social Security is politically untouchable because it's a massive profit center for State parasites. The problem is not that State parasites feel bad about cheating retired people. The problem is that current workers would no longer pay towards the scam if current retirees are cheated.

This illustrates the fallacy of paying into a State welfare system. As a worker, you expect that you're paying so that the State will take care of you when you're older. When you need the retiree benefit, State parasites default. What can you do about it? You're old now! It sucks for you that you wasted a huge chunk of your life working to pay a tax, only to be cheated later.

Social Security is even more obviously a scam for current workers. The Federal government isn't going to exist 20 years from now! I expect a 100% loss on my Social Security "investment". If there was someplace I could sign up to opt out, I would, forfeiting my benefit but also not having to pay the tax. Of course, State parasites collect taxes, backed by violence against those who refuse to pay.

Suppose the Social Security inflation adjustment is 10% less than true inflation each year. The net effect isn't that 10% of your retirement paycheck is stolen. It's 10% each year, compounded. The overall effect erodes the Social Security payment over time. It's the same way that inflation gradually steals your savings.

If there was a complete default on Social Security, then the scam will be obvious. If there's a gradual default via inflation, the net effect is the same. Social Security is politically untouchable. That isn't because State parasites don't want to cheat retired people. If there's a Social Security/Medicare default, then current workers wouldn't be conned into contributing towards this Ponzi scam.


fritz said...

Another good post. I was told by a lawyer there is a way to not have a social security number.
When you first go to get your number you request a guarantee of performance. A signed guarantee that you will be paid the same dollar value adjusted for inflation that you paid in. Of course no one will be able to sign such a thing so you opt out due to non guaranteed performance of contract.I wonder if a human being could opt out of a present contract under the same grounds..

Plus they use this number for 2 many things. Its for social security benefits only. Try this some time..when asked for your social security number reply "I would love to give you that but that number is for social security benefits only"

Anonymous said...

Inflation is an increase in quantity of money.

CPI measures prices over long term.

These two have nothing in common. It is a common fnord to call price rise an "inflation".

Inflation is a process by which connected people rob everyone else.

Prices uptrend is frequently an unpleasant visible consequence of inflation.

Remember when regular American used to wear quality made jeans to work? Those jeans a now priced so high that one can only afford to either wear them to a corporate conference or a holidays. Instead, we now have crappy quality Chinese made jeans for the same prices we used to pay for American.

This is the effect of one of the tools that the establishment uses to mask the inflation, by removing the visible effects of it (price rise), in this case by substitution with lower quality.

Prices on "jeans" therefore could be considered steady, and yet, in the meanwhile, your wealth has been stolen through inflation.

FSK is right, I am not so sure who is more crazy, FSK or so called "normal people".

Anonymous said...

You *can* opt out of social security if your religion "is conscientiously opposed to accepting benefits of any private or public insurance" (and there are a few constraints on what religions qualify). Check out IRS form 4029 for more details.

Faced with the choice of going to church once a week, reciting some creeds I don't really believe, and zoning out for an hour, or forfeiting a sizable portion of my wages to theft by the Social Security tax, I'll choose the former. Even if I'm socially pressured to make tithes to the church, doing that would *still* be cheaper than paying Social Security.

Chrono said...

Form 4029 is probably a loophole for the rich. Henry Paulsen (former treasury secretary and former Goldman Sachs CEO) is a Christian Scientist.

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