In a moment of exasperation yesterday, I found myself updating Twitter with the simple comment: “Abolish Social Security!” I don’t recall exactly what set me off, but it was probably an amalgamation of President Obama talking up his economy (I mean, really?!) and the talking heads continuing to blame George Bush for everything from weather patterns to the BP oil spill. Something reminded me of Social Security and I snapped. Fearing I’d made a silly exclamation, I started doing a little thinking about Social Security.
I don’t think my exclamation was rash or silly.
When Social Security was first introduced by the Roosevelt administration, it was done so at the peak of the Great Depression. Funny, Social Security was the product of…get this….
The Report of the Committee on Economic Security
Ha! Sounds just like Obama’s Economic Advisory Board! See, the entire point of these committees or boards is to provide political cover for the President.
As I read through the history of the CES, I was struck by the amazing similarities between then and now. The Social Security Administration’s own history says:
“One of the most remarkable facets of the story of the CES is how little time it had to do its work. The CES was created in June 1934, Witte did report until the end of July, most of the staff did not start work until the end of August, and the CES was required to issue its report to the President in December 1934. Six months to create an American social insurance program!”
Sound familiar? Remember TARP and the Porkulus Bill? They had to be passed with great haste or else the country was going to fall into the sea! (Well, maybe only Congressman Hank Johnson thought the country might fall into the sea, but you get my meaning.)
Anyway, there are many reasons why we should abolish Social Security in its current form. Here are the top three:
1) The government is fraudulently running the system – Social Security taxes are paid by every person who earns a wage. The Social Security Administration (SSA) even issues annual reports to each individual showing their total contributions and expected payout on retirement.
This is a complete ruse. First, the government does not assign the money you pay into an account assigned to you. Rather, the money is dumped into a big bucket. From that bucket, current beneficiaries are paid. The rest of the money is doled out to other government programs. There is no “social security lockbox,” and there is most certainly no money collecting interest for you when you retire.
But this is not what Roosevelt told Americans when he was out on the stump pitching it. When Frances Perkins, Roosevelt’s Labor Secretary, delivered her radio address to promote Social Security, she explained it as a pension plan:
“For those now young or even middle-aged, a system of compulsory old-age insurance will enable them to build up, with matching contributions from their employers, an annuity from which they can draw as a right upon reaching old age.”
To me, this sounds a lot like it is an account that you’ll pay into, your employer will match and voila, the money will be there for you when you retire. NOT! An annuity?! What a lie!
The silly statements we all get from the SSA are designed to continue the ruse. People get that document and think, “Wow, I won’t have to save as much myself….look at how much I have in my Social Security account!”
2) The government has no way to pay the benefits it has promised – This is a direct correlation from #1 above. Because the government only taxes and distributes, it is a mathematical certainty that if they pay out more than is paid in, the program will run a deficit. With no investment, there is no possibility for increased worth. In a private trust fund, the money taken in is invested. Over time this pool of money grows. When it’s time to pay back beneficiaries, there is a sum of money able to meet the requirements.
Not so with Social Security.
This is because the government takes the money paid into Social Security, and spends it. The government accounts for this by issuing a Treasury Bond in place of the stolen money. Here’s the rub: the type of bond issued can only be issued for Social Security funding and is not available to the public. So it is basically just an accounting gimmick – an IOU from one government agency to another. This is like over-drawing your checking account and using a second overdraft account to pay back the first overdraft. How long until this stops working?
As it turns out, it is essentially not working already. The national debt is some $14 trillion. So if the government is issuing IOU’s to the Social Security Trust Fund, how are those IOU’s to be paid back? The government will either have to print more money, raise taxes, cut benefits, or some combination of these.
3) Private investments preserve freedom and liberty – Ronald Reagan famously quoted, “You can’t control the economy without controlling people.” Indeed, you cannot. When the government controls how much money you will have when you retire, it controls your life. What if you are 70 years old and the government decides to cut your reimbursement? What recourse do you have?
You don’t have any recourse.
How would you like to have a 12.4% salary increase? in 2010, you must pay 6.2% of all wages earned (up to $106,800.00 – what pencil-neck came up with that number??). But your employer has to match that amount. Remember – the entire amount – 12.4% of everything you make, goes into a black hole. It is spent along with all the other crap that the government spends money on. Then, an IOU is issued.
The government has PROVEN that it cannot manage this money. This is important as we draw conclusions below.
3) Social Security is probably unconstitutional – Alright, call me a libertarian loon, if you will. That doesn’t make me less right. The Constitution was intended to serve as a rule book. Any power not specifically granted by the Constitution to the government is delegated to the people, or to the States to figure out. There is a good bit of information about the enumeration of powers here.
I challenge any reader to identify the section of the Constitution that says the government is allowed to confiscate earned wealth so that it can distribute money to you in retirement. Sure the 16th Amendment gives the government the ability to collect income taxes. If that is the case, fine. Collect income taxes. But don’t say we’re going to each have a retirement annuity based on our contributions and tack another 12.4% on top of the real income taxes!
So what should we do?
First, here is a brilliant, and workable, solution proposed by Congressman Paul Ryan. This should be what we get behind since it is based in reality.
Second, work toward completely abolishing the system. Providing help to those in need is just fine. I am fine with safety net systems funded by taxpayer dollars. But Social Security goes way beyond that. Why the hell should a man who makes a decent living (most Americans) need a government handout to get by in old age? No reason whatsoever. The only compelling reason is that because the government started giving the handout, people are now PLANNING for the handout instead of planning for their own future.
We must work on educating people, young and old, about how free markets yield success. How a return to Constitutional principles can help make everybody more free. To encourage personal responsibility. Not to continue down the path of government control over our lives.
The government has a vested interest in providing for us in old age. By controlling your income during old age, the government then controls you personally. By developing a system that allows people to save for themselves would foster economic growth, personal freedom and liberty and an adherence to our founding principles.