The Social Security Administration helpfully sent my wife a statement explaining “What Social Security Means To You.” Because, you know, we cannot possible figure that out for ourselves; we need the federal government to tell us.
Unfortunately, but not unexpectedly, Michael J. Astrue, the Commissioner whose signature appears on the letter, is a liar.
He claims that the statement “can help you plan for your financial future.” Not so. Instead, it merely reminds us that we cannot plan for our own financial future to the degree that federal politicians force us to pay payroll taxes.
Astrue claims that “Social Security is a compact between generations.” Not so. A “compact” is “a formal agreement between two or more parties, states, etc.; contract.” But a contract implies mutual consent. We never consented to paying the Social Security tax. Indeed, we have asked repeatedly not to have to pay the tax, in exchange for not receiving any benefits. Forcing children, including our unborn children, into this socialist Ponzi scheme is not a “compact.” It is generational theft.
Astrue does helpfully point out, “In 2017 we will begin paying more in benefits than we collect in taxes. Without changes, by 2041 the Social Security Trust Fund will be exhausted and there will be enough money to pay only about 78 cents for each dollar of scheduled benefits.” This is a half-truth. The full truth is that this alleged “Trust Fund” is merely a claim on general government revenues, dependent on tax receipts.
Michael J. Astrue, Commissioner, claims to know what Social Security means to us. Not that he cares what Social Security actually means to us, but I’m going to explain it anyway.
My wife’s statement summarizes that she alone has paid $51,474 in Social Security taxes (employer plus employee side), plus $12,022 in Medicare taxes. So my wife has paid a total of $63,496 in payroll taxes, so far. (And she’s only 31. She gave me permission to post these numbers.) So what does Social Security mean to us? The payroll taxes mean:
* That we are just now climbing out of debt, when we could have built a positive net worth many years ago.
* That we just bought a house last year, when we could have afforded a house years ago.
* That we have put off having children. This alleged “compact between generations” has prevented us from even meeting the next generation of our family.
* That we have considerably less money saved up for emergencies, health expenses, and retirement.
* That we have scrimped and cut budgetary corners when we could have spent more on food and entertainment. While we would have put only a small fraction of the funds toward entertainment, a little goes a long way. We could have gone out to eat more, seen more movies in the theater, taken more vacations, and purchased higher-quality groceries.
Social Security is horribly unjust, particularly harmful to the working poor, and a gross violation of individual rights. What, then, is the solution?
As I’ve argued, it would be wrong (and politically infeasible) to cut benefits for current recipients. However, the further someone is away from retirement, the better the person is able to adjust to changes in the system. Thus, the best and easiest reform is to phase out Social Security, by increasing the pay-out age by a few months every year until, after a period of decades, nobody is collecting benefits and the tax is completely eliminated.
But I don’t think that will be the reform that Congress pursues. Instead, what seems to be on the agenda is for the Federal Reserve to inflate the money supply, such that all the promised dollars for Social Security are paid out, but those dollars are worth much less, even as the federal government is taxing larger monetary incomes to cover the tab. Neat trick, inflation. Because we must preserve the “compact between generations” by ensuring a devalued economy for our youth.
Way back when, those oh so many years ago, I was in High School. We did a small project in a class. At that point in time based upon expected nominal incomes. Myself and my classmates would have to had lived to be something like one hundred and eighteen years old to recap what we would have put into “social security.” Now, to be sure, medicare was still lumped in with it in those days, but?
We also developed figures that showed that if even half of the same amount of money was placed into a pass book savings account we would have almost three times the money to use for retirement and related expenses.
I can only wonder what the results of the same sort of cursory study in personal economics would show today…
I do want to emphasize that I DO NOT favor forcing people to put their money into a “private” (actually politically controlled) account. People should be free to do with their money whatever they deem best. My phase-out plan has nothing to do with “replacing” Social Security with mandatory accounts. That said, yes, people would generally be much better off if they were free to keep their money, rather than forced to funnel it into Social Security.