Ambidextrous Thoughts

This site is intended to offer research and commentary on current events covering a wide scope of topics. Over and over again, I see social media offering quick access to the latest news or trend, but often with very little thought or fact-checking put into it, which lends itself to misleading half-truths. The intent here is not to take a political side, but to discuss the differences expressed by many who use social media as their source of news and information. My aim is to look at both extremes of a topic, and try to find a way to come together. I welcome input and suggestions on subjects that you’d like to know more about. Some conversations may have a political theme, but I hope to discuss issues that affect our everyday life, whether it be what kind of education our children are really getting, why are medication prices spiraling out of control, are unions a help or a hindrance to our workers today, or what “entitlement” really means. Bookmark this spot and see how we do as we try to make a fair place to open discussions on the subjects that interest you most. By – JRBecker

SOCIAL SECURITY – ENTITLEMENT or PONZI SCHEME?

Posted by on Sep 30, 2016 | 2 comments

SOCIAL SECURITY – ENTITLEMENT or PONZI SCHEME?

CONVERSATION: Today, entitlement is almost a dirty word. It is still used to mean a right, as in, “you’re certainly entitled to your own opinion.” But it has also come to be used as a label for assistance programs provided by, or administered by the government.

Part of this is caused by our own language. We have many words in English that have more than one meaning, and some meanings are actually contradictory. One term for words used in a new or different way is semantic change, referring to a word definition that has changed over time. https://en.wikipedia.org/wiki/Semantic_change. An example of semantic change is the word “hack.” It has meant everything from a taxi or taxi cab driver, a bad cough, to roughly chop, and a lazy person, or a quick and easy way of doing things. The most recent changes involve the Internet or computer technology. Most people don’t know that to be a computer hack started out meaning being able to find fixes, both temporary and permanent to various problems that cropped up as computer technology came to life. It has evolved over the last 20 years to mean a network or computer break-in for nefarious purposes, or the person who commits that break-in. And yet the Internet is filled with articles called ‘Closet Hacks’ or ‘Garage Hacks’ or ‘Patio Hacks’, explaining how to cut costs, or time, or do something in an entirely new way.

“Entitlement” is a victim of semantic change. Entitlement was originally something to strive for, as in: to become independent and wealthy so as to live a life of entitlement. Although that’s a little stuffy sounding for today’s society, I hope it makes the point.

So the question is, if not an entitlement, what do you call Social Security? It’s not a personal account. It’s not invested monies (thankfully – or it might be gone now) and it’s not a tax refund. It originally included assistance for the unemployed, but states have since taken over that portion of the original Social Security Act, that came into being under Franklin D. Roosevelt in 1935 – although the government still sometimes helps the states. It is money that comes out of our paychecks as a tax, (FICA) – along with money that goes for Medicare – and is administered by the government based on how long we’ve worked and how much we’ve made. (But not how much we’ve paid in, other than the correlation with the formula used for disbursement.) It’s then redistributed to us, individually, when we reach retirement age or suffer a debilitating injury or illness. And our families – spouses and children – may benefit from our Social Security as well, not only while we’re alive, but continuing after, should we die before them or in the case of children, until they are no longer minors.

Officially, Social Security is defined as an entitlement. If you wish to read more about the concept of Social Security, the following is a good place to start:  http://www.pewresearch.org/fact-tank/2015/08/18/5-facts-about-social-security/  But there are actually many people who believe that this money is a form of government welfare. Even very wealthy people can qualify for Social Security and receive benefits as long as they have worked and paid into the FICA system for at least 10 years. They would then also qualify for Medicare. They are entitled to it – this is the distinction between an earned entitlement and generalized welfare programs.

The definition of welfare is: a government program for poor or unemployed people that helps pay for their food, housing, medical costs, etc. http://www.merriam-webster.com/dictionary/welfare. No one has to pay into a welfare program in order to receive it. Yes, I know, we all pay towards welfare with our taxes, but the recipient has no obligation to have worked, ever. They do have to be either United States citizens or legal residents in order to receive anything from most welfare programs. These funds are also called entitlements, but they fall under the definition of “funds provided by government for a special group”; indigents, mentally ill, children, etc.

It is important to note that refugees from other countries do not just get to jump onto Social Security or any of the welfare programs. They do, however, receive assistance from our government as provided under the Refugee Act of 1979. http://www.acf.hhs.gov/orr/resource/the-refugee-act. The aid is mostly in the form of helping refugees find work, learn English, and find housing until they become self-sustaining. Also note, refugees are not the same as immigrants. Refugees are people fleeing from persecution, war, or other unsustainable living conditions. Many of them will want to return home, in the event their homeland is again safe. Immigrants are people moving here for a variety of reasons, such as school or jobs, but mostly because they want to live here, and usually because they would like to become U.S. citizens. Both refugees and immigrants must be vetted by our government, and that process can take two years or more. Prior to being approved to enter the U.S., refugees are often held in temporary camps or other accommodations in countries that have agreements with America to help in relocation processing. In any account, monies used to help refugees and immigrants comes from our tax dollars, but not from our standard entitlement programs such as Social Security, unemployment, welfare, etc. (In some cases, refugees and immigrants have their own means of support, and do not need government assistance.) For more about the vetting process go to http://www.heritage.org/research/commentary/2015/12/how-the-refugee-vetting-process-works.

Another favorite criticism is that Social Security is a Ponzi scheme. A Ponzi scheme is where people receive an income from new investors who then receive their income from even newer investors, and so on. In a typical Ponzi scheme, each layer of investors receive a percentage of income from all of the layers that come after them.

What makes the Social Security system appear to be a Ponzi scheme is that each generation is paying into the retirement program for the previous generation. With a Ponzi scheme, investors eventually stop investing, leaving earlier investors with no income. Social Security will always have income, although it may need to be adjusted from time to time (and has been) because of fluctuations in the population. Sometimes the payouts of “returns” on a Ponzi scheme become so high that the investments coming in can’t cover the returns. Every year until 2009 more money came in through FICA than was disbursed in retirement and disability checks. (In 2009 the surplus faltered, due to the recession, but is now climbing again.)

In 1938, the Advisory Council on Social Security, (a new group comprised of economy experts) endorsed the purchase of U.S. Treasury Bonds with the annual surplus money from FICA taxes. Since then, the surplus has always been placed in a trust fund, but the government has borrowed money (T-Bonds) from the trust fund and replaced it with IOUs. Since that time, Congress and presidents from both political parties have borrowed the T-Bonds to finance projects, wars, tax cuts, and other budgetary needs. Although Social Security does not, and cannot by its nature, contribute to the National Debt, the money owed to it by our government is figured into the National Debt. That amount currently stands at about 15% of the total debt, or over half of the intragovernmental debt, according to http://www.justfacts.com/nationaldebt.asp. The government pays interest on the money it owes, but is not paying the actual debt off, at this time. In the event repayment of those bonds became an immediate necessity, the government would have to borrow the money from an outside source, or from some other existing program. Currently, there is no plan in place for the government to begin paying back the money it has borrowed. Might this be a logical matter for congressional and presidential candidates to consider on their platforms? Let’s talk about this. Tell me what you think in the comments section.

For more information on these topics, The Institute for Public Accuracy (IPA) has a site that discusses this and other government functions and is found at http://www.accuracy.org/release/social-security-has-a-large-and-growing-surplus/

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ENTITLEMENT – What Is It?

Posted by on Sep 13, 2016 | 4 comments

ENTITLEMENT – What Is It?

Full Definition of ENTITLEMENT – Merriam-Webster Dictionary

1.a. The state or condition of being entitled
1.b. A right, especially by law or contract

2. A government program providing benefits to members of a specified group; also funds supporting or distributed by such a program

3. Belief that one is deserving of or entitled to certain privileges

So let’s look at these different meanings.

1a. The state or condition of being entitled: Some simple entitlements might be the right to choose what we wear, or what we want to order from a menu. We are entitled to receive what we paid for, in the condition promised. We are entitled to an agreed amount of payment for an agreed amount of work. After meeting certain conditions, we would be able to claim the right or entitlement of driving cars.

1b. A right, especially by law or by contract: Each World Country sets the entitlements that pertain to their citizens. We will only be discussing the United States of America in this post.

Our constitution was written with the idea that every person is entitled to Life, Liberty, and the Pursuit of Happiness. Through a series of Amendments, additional rights and entitlements have become law over the years. Some of these are freedom of speech, freedom of religion, the right to bear arms, and the right to vote.

In law, there are certain entitlements that protect the rights of artists, writers, inventors, and so forth. Copyrights and Patents can be applied for by the original creator. This helps assure that no one else can profit from the work of the inventor, author, song writer, etc. That person can, however, sell their rights to other parties; usually producers, publishers, museums, to name a few.

2. A government program providing benefits to members of a specified group; also funds supporting or distributed by such a program: An Entitlement would refer to such programs as Social Security, Medicare, Welfare, Medicaid, WIC, unemployment, workers compensation, certain grants, and many others. Even The Earned Income Credit at tax time is an entitlement program. Education and housing are other areas where entitlements can come into play.

There is a common thread of thought in today’s society that all financial entitlements are forms of charity, or freebies, or handouts. In fact, several are not. First, though, it’s important to know that the Federal Government does not control all forms of entitlement. Individual states are responsible for a large portion of social programs, so differences in benefits can be found across the country. Sometimes the federal government – generally congress – sets regulations for such programs, and in some cases, the states receive federal funds, (again set by congress) to help them meet their social expenditures. In other cases, the state may independently develop and control a program such as health care.

Welfare: There are categorical grants from the federal government to state and local governments, in which specific uses and spending plans are stated. There are also block grants, where the federal government gives states and local governments monetary assistance with little or no stipulation on how it is to be spent.

TANF, or Temporary Assistance for Needy Families, is a block grant. TANF replaced ADFC, or Aid to Dependent Families with Children, which was a categorical grant. Since TANF is a block grant, each state controls what the requirements are for receiving aid, and the length of time that aid can be received, up to five years in total per family (the federal standard). UPDATE: as of 2017, some states are reducing the amount of lifetime aid that can be received to as little as one year! The federal government also stipulates that work requirements must apply to TANF recipients. In other words, they have to find work within a certain amount of time (decided by the state) and report income accordingly. Besides cash, some ways that TANF is applied is for finishing high school or obtaining a GED, some vocational training, and child care.

Categorical grants are given by Congress and have the advantage of federal guidelines. Each recipient receives the same benefits and/or restrictions in all states, counties and cities. Head Start and Medicaid are examples of categorical grants. Food Stamps fall under a categorical grant, in that congress decides the benefits and rules and the federal government funds the direct expense of the stamps. In this case, though, the federal and state government split the expenses of running the service.

Food Stamp or SNAP criteria (Supplemental Nutritional Assistance Program) is usually the same as the TANF requirements. For both SNAP and TANF, the recipients must be United States citizens, or have legal residence status. They must also have a Social Security card for each member of the household.

The forms of welfare mentioned above are all tax-payer funded. Whether financed by the federal government or a state or local government, our tax dollars are the source of their revenue. The federal government calls them “safety nets”, and that is what they are intended to be. There are, of course, people who abuse them by lying, or by using them beyond the point of need. For some, it’s easier to sit home and get a free check than to find a job and actually do it. Statistics show, however, that the majority of people receiving TANF have found work and gotten off of government assistance within a year. The following chart shows U.S. Census statistics for the years 2009 through 2012.

The states that provide educational assistance with a combination of other job oriented assistance – such as day care, have the highest rates of success in recipients leaving the TANF program within a year or two. Unfortunately, some states provide as little as 5% of TANF monies from the federal government on programs that actually lead to better employment. Some of these recipients are able to find part-time, or minimum entry work after getting a GED, but not work that pays enough to sustain a family without continuing TANF assistance. A larger group may be able to find employment that allows them to get off of TANF, but still require food stamps or housing assistance. The most successful stories come from people who have access to programs that lead them to job-related education, whether college or trade school.

Much of welfare is spent on the physically or mentally disabled:

Medicaid is health insurance provided for people in poverty or near poverty situations. People who are on Medicare may also be eligible for Medicaid if Medicare does not cover certain conditions or if the applicant receives a poverty level of overall income. Many people with mental health issues are eligible for Medicaid. The problem is that they may not know it, or be able to ask for help.

SSDI – Social Security Disability Insurance is a program for those who have been working, usually 5 out of the last 10 years or more, and become disabled due to injury or illness and can no longer continue working. Mental health issues may also be covered. The amount they receive is based on how much they have worked and paid into Social Security in the past, much like how Social Security payments are determined. SSDI comes out of a special part of the Social Security Trust Fund. Fifteen percent of what we pay into Social Security is placed in the disability trust fund. SSDI beneficiaries will be placed on Medicare after two years.

SSI – Supplemental Security Income is NOT an actual Social Security program although Social Security administers it. This is a federal program that was previously run by the individual states as part of their welfare program for people who are blind, elderly or disabled. It was moved to Social Security for administrative purposes, but is paid out of federal general funds that come from our taxes. People with disabilities who have never worked, or who did not work long enough to build up credits towards SSDI can apply for SSI.

Although I don’t want to start a discussion in the middle of this post about illegal immigration issues, it’s only fair to address the complaint that many people in the United States are here illegally, whether by visa over-stay, or illegal entry. One of the biggest complaints is that these people are taking benefits such as Social Security, especially the SSDI portion, away from citizens that need it. In an ideal world, there would be none of that, or at least very little. We simply do not have the manpower, or the funding for the latest technology to catch people willing to apply for assistance, even knowing they are breaking the law. This complaint also impacts other areas of assistance, including housing, education grants, and Medicaid. We don’t just give these benefits to anyone that asks, but departments that are underfunded and understaffed do make more mistakes. And there are cases where it becomes somewhat complicated, in that parents may come here illegally, but any of their children born here are automatically citizens, which entitles the child or children to certain benefits if they are living near or below the poverty level. In that case, the parents would receive the benefits in the child’s name. In actuality, the only entitlement illegal immigrants have in the United States by law is humanitarian emergency medical treatment, for instance, if someone had a heart attack or was struck by a car. Our government, whether federal or state, is not willfully giving away benefits meant for citizens and legal residents. In a future post, we will have a discussion about immigration in more depth.

At the end of this article, I will provide links where you can report suspected fraud of Social Security, unemployment, SSI, and other assistance programs.

Social Security – Social Security is perhaps the most well-know of all the entitlement programs. More than 60% of older Americans receive 50% or more of their income from Social Security. There are over 40 million retired workers in America today, as well as nearly 3 million spouses or children of retirees that are eligible for benefits.

Social Security taxes (FICA) are paid by working individuals at a current rate of 7.65% annually, on earnings up to $118,500 for the year 2016. Normally, these numbers rise slightly each year. FICA stands for Federal Insurance Contributions Act and also includes Medicare taxes at a rate of 1.45%. Employers also pay into Social Security taxes at a matching rate, so an additional 7.65% is being paid on the worker’s behalf. Self-employed persons pay at a rate of 15.3%.

There are many layers to Social Security, such as widows and dependents benefits and early retirement, but they basically work the same way. They are there to protect working people and their families when they are no longer able to work for an income.

This is not a form of welfare, as you can see, because we are all paying into it, and all are entitled to a return when we reach retirement age. There is a formula that is based on our earnings over time and the length of time we work, which determines how much we are due monthly when we file for Social Security. We can continue to work once we reach retirement age (currently 66, but will be 67 if born in or after 1960) and still collect Social Security, however our monthly checks will not increase once we begin to collect. If we decide we want to work longer, there is no penalty for delaying Social Security until the age of 70. In that case, our benefits continue to rise, and our monthly check will be increased at 8% annually, or approximately 32%.

Medicare – Medicare is health insurance that becomes available to all U.S. citizens when they reach the age of 65. As stated under the paragraph about Social Security, Medicare funding comes from workers’ FICA withholdings. Again, this is not a welfare program since we pay into it while working. Everyone should file for Medicare part A – hospital insurance. Medicare part A is free, as long as you have worked and paid into it for at least 10 years. If you have company insurance, you can continue to use it and still receive Medicare. Depending on the circumstances, either Medicare or your employee insurance will become your primary insurance. Your coverage begins the first day of the month you turn 65.

You can file for part A up to 3 months before you turn 65, or wait up to 3 months after you turn 65. You cannot use the insurance from the Affordable Care Act and Medicare at the same time. Once you become eligible for Medicare you are no longer eligible for ACA insurance policies. You can delay signing up for part B – medical insurance – if you are fully covered under a plan through work. (Your policy needs to be verified to make sure the coverage is acceptable. If you delay, and don’t have creditable insurance, there is a penalty for every year (12 months) that you delay. That is, your Medicare coverage for doctors, tests, scans, etc. will be penalized. There is also Medicare part D, which covers prescription drugs. If you want to sign up for this, it should be done at the same time that you enroll in part B. A late penalty is charged for delay on this, as well. There are also small monthly fees for parts B and D. Part B can be taken out of your Social Security check automatically, and is recommended, but you can pay by check if you prefer. You can either send a check or have an auto-withdrawal set up for part D supplemental payments. Prices vary. There are a multitude of insurance advisors that will work with you for no charge if you’re interested in getting additional supplementary insurance, which would help pay for the difference between what Medicare covers and your responsibility beyond that.

Generally, you can’t get Medicare until age 65, but there are a few special exceptions for receiving Medicare early, including if you have ESRD (End Stage Renal Disease) or a kidney transplant. A good website to check for more information about Medicare is https://www.medicare.gov/sign-up-change-plans/get-parts-a-and-b/when-coverage-starts/when-coverage-starts.html

Unemployment – Unemployment is not often thought of as an entitlement program, but it is. Claims are made to your own state, and the rules vary from state to state. Employers who have four or more employees pay FUTA taxes (Federal Unemployment Tax Act) to the IRS. This funds the cost of administering the Unemployment and Job service programs in all states and U.S. territories, such as Puerto Rico. States can borrow from the federal government to pay the actual unemployment expense. The loans must be repaid with interest. As a rule, most benefits are only paid for 6 months, and require proof of job searches.

And finally, an obnoxious form of entitlement:

3. Belief that one is deserving of or entitled to certain privileges: This is when a person or group believe they don’t need to follow customs, rules, regulations, or laws. Examples – He feels that he is entitled to jump to the front of the line in the cafeteria because his work is important and he needs to get back to it quickly. Because her father owns the company, she feels she can be rude and obnoxious to the employees. Moreover, many young people now entering the work force believe that their schedules should be set around their specific preferences. One other example that I find particularly puzzling is the criminal defense of “Affluenza,” which is an example of egregious misuse of entitlement. For those who don’t know, affluenza refers to being so affected by wealth and privilege that one does not know the difference between right and wrong and is therefore not guilty of a named crime. At least two instances of this defense have been successful in recent years.

I have, by no means, covered all the various entitlements available in our society. There is housing, school lunch programs, educational grants, the Veteran’s Administration, public education, and on and on. I tried to touch on the ones that affect the largest amount of people, and the ones that are the subject of contention in the news at the present time. If there is something in particular that you would like to know about or discuss, please let me know in the comments section and I will do my best to offer up useful information.

***There are some people who say that Social Security is a Ponzi scheme. I had intended to write about that here as a discussion point, but I think I will do a full second post addressing the arguments for and against that theory. If you have feelings or ideas about that, please go to the comments section and let me know what you want to see or contribute. Use this as a reference, or look up questions you have using the links I’ve provided, so that you can join in on the Ponzi scheme discussion. If you have information, I’d love to hear that, too. I hope to have the next post up before the end of September. [This blog format requires an email address when entering a comment. Your email address will not appear with your comment.]

****Report Fraud:

  • Before you report, remember that filing a false report is also a crime. You don’t need proof, but be prepared to advise the parties you contact of how you know, or why you suspect someone is committing fraud.

Social Security fraud: https://oig.ssa.gov/report

Medicare/Medicaid fraud: https://oig.hhs.gov or contact the Department of Health and Human Services Office of the Inspector General at 1-800-447-8477

Unemployment fraud: https://www.dol.gov/general/maps/fraud This site gives numbers to call or websites for each individual state

Food Stamps or SNAP fraud: https://www.usda.gov/oig/hotline.htm or to your state Food Stamp Office

*Much of my information about Social Security and SSDI and SSI was gathered from https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2016/fast_facts16.pdf and this link was provided by newspaper columnist Tom Margenau. Mr. Margenau was national director of Social Security’s public information office for several years. https://www.creators.com/author/tom-margenau

 

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