Do "liberals" know what compound arithmetic is? If so, do they also know how to do it?

[lare]

SSA is not a "compound" or Ponzi. It is a transfer. People who are working pay in so that people who are retired can collect.

The current USA workforce, the total paying FICA tax is 168 million. The current total of retirees drawing social security is 56 million with an average benefit of $1200/mo. Why is the benefit more than the FICA tax you pay? because you work typically 45 years and live 15 years after retirement, that is a 3:1 compression that allows taking money out faster than put in. so you need to contribute $400 per month to sustain this ratio. Half of this is contributed by your employer, so that is a $200 FICA deduction from your average monthly paycheck. The media salary is about $5000/mo and FICA for that is 7.5% or $375. So with current statistics, SSA is taking in more money than it pays in benefits. $70 B more in 2011, and has accrued a $2.6 T surplus to date.

The system is not a Ponzi, every person that contributes will get the benefit earned. Those benefits are earned, that is why they are called "entitlements" and not "give away" or "dole". It is a transfer tax collected on current workers to pay benefits to current retirees. This is a more efficient plan than stuffing current contributions into a shoe box to collect 30-40 years later.

Why is there a surplus? because not every generation produces the same number of workers, the generation born right after WW2 was a boom. Those boomers are nearing retirement so the surplus is there for them to draw down. The last tweak to the system was done under Ronald Reagan (a Republican) and corrects for the boomer imbalance.