Social Security is often called "the third rail of American politics." It is
a program which puts the federal government in the position of guaranteeing retirement
money for anyone who lives 65 years. Of course the federal government is not
authorized to undertake such business, as there is nothing in the Constitution
which authorizes direct payments to individuals. Saving and investing
for a comfortable retirement is the business of banks and credit unions.
The IRS started
requiring Social Security numbers on tax returns in 1962.
Over the years the Social Security number has become a de facto national
identification number, and may end up on your
National ID Card even
though everyone was assured that would never happen when
Social Security numbers were first assigned. Back then, had the
public been able to foresee today's use of the Social Security number as a
serial number for every worker, no doubt the program would have met
with great opposition.
Quoting from CPSR:
For the first few decades that SSN cards were issued, they carried the
admonition: "Not to be used for Identification." Unfortunately there was
never any law passed instituting this as a policy. The Social Security Agency
was apparently attempting to instill good values in the citizens, but was
apparently unsuccessful in preventing government encroachment into this territory.
Today, Social Security "contributions" are withheld from the paychecks of people (like me) who
are given little or no realistic hope of ever seeing that money again. It is
therefore just another federal tax. "Guarding Social Security" is a
way to buy votes, or to frighten the elderly into voting for the people who are
most likely to perpetuate the system. But the government's hollow promise
of assuming responsibility for an infinite pool of retirement money is not just
hard to believe — for young wage earners especially, it is beginning to
look like a colossal hoax and a cruel scam. With the recipients living longer and becoming
more numerous, many people consider it one of the greatest pyramid schemes of all time.
The whole notion of retirement is a relatively new concept. The Bible (that is, the
authorized King James Version) mentions nothing about retirement — apparently
we're supposed to keep working until we die.
Some of the information on this page pertains to the use and abuse of the Social Security Number
as a national identifier. More information can be found
on this page.
All the information about Medicare, Medicaid, and prescription drug benefits for senior citizens is now
on this page.
Facts on the Social
Security: This year for the first time in recent history, the federal government
will have to use general revenue to pay Social Security and Medicare benefits — about
$45 billion, or 3.6 percent of federal income taxes. The general revenue
requirement as a share of income taxes will double in less than five years; and five
years beyond that, it will double again.
An
eighth of every paycheck. You Don't have to be a financial wizard to know
that Social Security is a lousy investment. Unlike the money you deposit in a bank
or salt away in an IRA, you don't own the money you pay into Social Security. You
have no legal right to get those dollars back, and when you die you can't pass them on
to your heirs. Nor can you use your Social Security account before you
retire — you can't borrow against it and you can't cash it in. You
aren't allowed to put the money into a balanced portfolio. You can't even watch as
the interest accumulates, since your Social Security nest egg doesn't earn any interest.
You Have NO Right to Social
Security. Various congresses and presidents have raised Social Security taxes at least 40 times
since the program commenced in 1935. Also, the retirement age currently is creeping toward 67.
Such steps deprive Americans of their retirement assets. None of this should be surprising. Social
Security funds do not belong to individual workers and entrepreneurs. This money is the property of
Washington politicians and they may do with it whatever they please.
Fooling
Ourselves into Entitlements. In 1935, when Congress enacted Social Security, protracted retirement
was a luxury enjoyed by a tiny sliver of the population. Back then, Congress did its arithmetic ruthlessly:
When it set the retirement age at 65, the life expectancy of an adult American male was 65. If in 1935
Congress had indexed the retirement age to life expectancy, today's retirement age would be 75.
The Entitlement
Mess. Congress is spending us into a hole. We hear about the cost of earmarks and the Iraq
war. But what about "entitlements"? That's the government's ironic term for programs that transfer
money from people who earned it to people who didn't. Entitlement? How can you be entitled to
someone else's money? To finance "entitlement" programs, the government threatens force against the
taxpayers who provide the money.
Social Security's
running out of time. Forget all the talk you'll hear about how Social Security is okay until 2040 or
thereabouts. That is, as we'll soon see, utter nonsense. The real problem starts only a decade or so from
now, when Social Security begins to take in less cash than it spends. How can I say that, given Social Security's
$2.3 trillion (and growing) trust fund? It's because the fund owns nothing but Treasury securities.
Normally, of course, Treasury securities are the safest thing you can hold in a retirement account. But Social
Security's Treasuries won't help cover the program's cash shortfall, because Social Security is part of the federal
government.
Distrust Fund: It's almost a
D.C. truism that anytime Congress creates a "trust fund" for a certain policy issue, the money flowing into
the fund will be diverted to something else. Government trust funds are set up with special taxes and
fees so that they will be less subject to normal budget constraints. That makes them desirable for
future Congresses to divert their proceeds to spend on pork. Payroll tax money in the Social Security
Trust Fund has for decades been emptied out to fund general government programs.
New warnings about entitlements shortfall.
Trustees for the government's two biggest benefit programs warned Tuesday [3/25/2008] that Social Security and
Medicare are facing "enormous challenges," with the threat to Medicare's solvency far more severe. The
trustees, issuing a once-a-year analysis, said the resources in the Social Security trust fund will be depleted
by 2041. The reserves in the Medicare trust fund that pays hospital benefits were projected to be wiped
out by 2019.
Social Security is in Trouble.
People are living longer and collecting more Social Security benefit checks. In 1940, life expectancy
was 61.4 for men and 65.7 for women. By 2000, life expectancy was 74.2 years for men and 79.5 for
women; by 2050, life expectancy will be 84 years for men and 87.5 for women.
$45 trillion gap seen in
US benefits. The government is promising $45 trillion more than it can deliver on Social
Security, Medicare and other benefit programs. That is the gap between the promises the government has
made in benefits and the projected revenue stream for these programs over the next 75 years, the Bush
administration estimated Monday [12/17/2007].
The Late Great Social Security
System: When Social Security was set up, its supporters pooh-poohed critics who warned that by
not investing the collected funds, the government was setting up a major fiasco. The pooh-poohers were
wrong, of course; the skeptics, right. Now, all those baby boomers whose FICA withholding kept the
system afloat for years will begin to drain funds. Soon, the money going to retirees will far exceed
money coming in. Hence the crisis.
The retirement
"monster": Taxpayers owe more than a half-million dollars per household for financial promises
made by government, mostly to cover the cost of retirement benefits for baby boomers, a USA Today analysis
shows.
Social Security: A Tale
of Two Problems. The first problem is that the federal government collects more — a
lot more — contributions to Social Security than what it needs to pay the current retirees.
The excess contributions are spent on other government programs and not really saved to pay for the retirement
of the workers who are making the contributions. All the surplus paid into Social Security over the
past 20 years has already been spent.
Social Insecurity:
America's Social Security system is a ticking time bomb. It is not a stable system and provides young
workers with negative returns. Reform is needed now to ensure the future of the system and the financial
security of younger generations. In 2017, Social Security will start to owe more money than it
takes in. The support base for the system is shrinking, as Americans live longer and have fewer
children.
Rethinking Social Insurance:
The single greatest threat to the fiscal health of the United States is the runaway growth of the nation's
major retirement and health care entitlement programs. Social Security and Medicare are projected to
grow from 7.5 percent of GDP today to almost 13 percent of GDP by 2030. Already, the two
programs consume over a third of the federal budget.
How Much Do Americans Depend on Social Security?
Many low-income workers depend almost entirely on Social Security for their retirement income, but it is often
assumed that high-wage workers can maintain their standard of living without Social Security benefits due to
their private pensions and savings. Surprisingly, however, even high-wage workers depend on Social
Security for a substantial portion of their retirement income and would significantly change their consumption
and saving behavior in the absence of Social Security.
Social Security and
Medicare Are Unsustainable. In 2011, the first group of baby boomers
in the United States will reach the age of 65. When the last of that generation
retires in 2032, 77 million of them will have ceased working and paying taxes and
will have at least begun receiving taxpayer-funded health care and pension benefits. A
similar trend is occurring throughout the developed world. In Japan, Europe, and North America,
the number of retirees will double over the next 25 years while the number of taxpayers will grow
only 10 percent. The economic consequences of these changes are
dire: higher taxes, slower growth, and lower living standards.
Social
Security — It Is Time To End It. Regardless of what we as a nation do, social security is a
system that is broken beyond repair. There is really nothing we can do to "fix" it. The
time has come to dismantle it and return the responsibility of planning for ones retirement back to the
individual. Those who do not plan accordingly should expect to be cared for and provided for by
their family as has been the norm for most of the history of this nation and of the world.
Krugman
vs. Krugman. In liberal Democratic circles, the debate over Social Security has taken a
dangerous "don't worry, be happy" turn. The argument has two equally dishonest components. The
first is to deny that Social Security faces a daunting financing problem … The second is to
mischaracterize the arguments of those who advocate responsible action, accusing them of hyping the
system's woes.
Direct deposit of Social Security
checks: safe, fast — and disastrous. As the federal agencies begin
another push for recipients to accept their Social Security checks by direct deposit, consumer advocates
point to a little-known risk of using the system: Recipients who have judgments against them are
vulnerable to losing access to their money. The problem, advocates say, isn't the direct-deposit
system, but the failure of banks to implement safeguards to protect accounts with exempt funds from
being frozen.
The Coming Financial Collapse of Social
Security. The first officially recognized financial collapse of Social Security
occurred in 1977. Government projections at that time showed, and everyone agreed, that without
major changes Social Security would be unable to pay all of its promised benefits within a couple
of years, with a yawning, continually growing deficit after that time.
Social Security bankruptcy
is the real inconvenient truth. By 2017, Social Security tax revenues will be less than promised
benefits, and a government system that millions of Americans depend on will become bankrupt. ... The
solution to Social Security's problems is to acknowledge the program's inherent flaws and to shift from a
government-run welfare program to a system of personal ownership. Specifically, allow people to divert
a portion of the money they pay in Social Security taxes into an account they own, control, and for which
they take responsibility.
Liberal Pyromaniacs:
Liberals behave like a pyromaniac who sets fire to his own house, then is angered because the rest of the family
try to salvage their possessions and escape from the blaze. Like the pyromaniac, liberals feed the destructive
flames of inflation with deficit spending on new welfare programs and the mandated monsters, Social Security and
Medicare. Then they become indignant when rational investors take steps to hedge against liberal-created
inflation.
Hillary
Clinton's memory loss: Hillary Clinton once again asserted during the latest presidential
debate that "the American people know where I've stood for 35 years." Yet, she repeatedly
refuses to tell us where she stands on Social Security reform. And when she does, Mrs. Clinton
misrepresents the condition of Social Security when she and her husband left the White House.
Clinton's Social
Security fecklessness. In words a more thoughtful Clinton likely would have avoided, the leading
Democratic presidential contender told a cheering crowd of AARP policy wonks and political activists that when
she's back in the White House, there won't be any talk about cutting or privatizing Social Security. "This
is the most successful domestic program in the history of the United States. When I'm president,
privatization is off the table because it's not the answer to anything," she said. Also off the table
will be any benefit cuts or increases in the retirement age.
The Slippery Social
Security slope: Most Republicans and Democrats, ideologists of all persuasions as
well, accept that Social Security as presently structured is not sustainable.
Social Security to Become
Key Issue. Three years after the collapse of President Bush's plan for private Social Security
accounts, Republican presidential contenders are eager to try again. Not so the Democrats, who gravitate
toward increasing payroll taxes on upper-income earners to fix the program's finances.
This is just brilliant.
Illegals granted Social
Security. The Senate voted yesterday [5/18/2006] to allow illegal aliens to collect Social
Security benefits based on past illegal employment — even if the job was obtained through forged or
stolen documents.
Social Security uncovers
illegal workers. Privacy concerns prevent the Social Security Administration from notifying
an employer that a hired foreign national is not authorized to work in this country, including someone who
may be a potential national security risk, says a government audit.
Stop
the Mexico Raid on Our Social Security! RetireSafe Delivers 115,000 Petitions
Opposing Social Security for Illegal Immigrants from Mexico. "Social Security is
not a welfare program and it should not be turned into a foreign aid program," said
RetireSafe President Charles Hardin.
Social
Security scam keeps on ticking. The Social Security Trustees issued their annual
report earlier this month, and the program's fiscal outlook is even worse than estimated last
year. Yet, as predictably as May brings rain showers from Heaven and bloated supplemental
spending bills from Congress, liberals in the media, the House and the Senate continue to deny
that the Social Security program faces a fiscal crisis.
A Mass Delusion: Personal accounts
cannot solve Social Security's cash flow shortfalls, but they could help to eliminate the mass delusion about
retirement security that the current program creates.
Your Social Security Number Is a Matter
of National Security. The federal government has enabled the widespread use of Social Security
Numbers by promoting their use by agencies other than the Social Security Administration — the
one agency that has truly legitimate uses for the number — and by failing to effectively
regulate how the private sector uses the number.
California Woman's Social Security Stolen by
Suspected Illegal Immigrants. Audra Schmierer's Social Security number really gets
around. It has been used by at least 81 people in 17 states, most of them probably illegal
immigrants trying to get work. The federal government took years to discover the number was
being used illegally, but authorities took little action even then.
Did
someone mention crimes committed by illegal aliens?
Man
Denies Trying to Help Terrorists. A former graduate student testified Friday [6/16/2006] he
used a fake Social Security number to obtain credit cards but denied accusations that he tried to help
terrorists. A naturalized U.S. citizen born in the West Bank, Arwah Jaber said he was "trying to
survive" and did not believe at the time that it was against the law to provide false information on
credit card applications.
[Nonsense. How many of you believe that a 34-year-old man with a PhD did not know it was illegal to
put false information on credit card application?]
Getting rid of
reckless spending. We are less than one generation away from Congress being unable to pay
for anything other than Medicare, Medicaid, Social Security, and interest on the federal
debt — leaving not so much as a penny for defense or homeland security.
Social
Security is at the roots of the shift. Nancy Pelosi and Harry Reid had a decision to
make. President Bush was starting his second term with a brash challenge to a sacred Democratic
program — Social Security — and the House and Senate Democratic leaders needed a coordinated
response, and fast.
The dried-up veto
pen: Pork barrel projects — even tens of billions of dollars of
them — are not what have dug us into a fiscal hole. It is the rapidly
escalating cost of entitlement programs. President Bush is well aware of the
problems in this area. He eloquently explained the deteriorating fiscal condition
of Social Security in many speeches this year, as part of his effort to reform that program
and stabilize its finances for future generations.
Five Ways to Fix
Social Security: Anyone who knows anything about Social Security knows
it is an intergenerational income transfer program. The transfer is from the
young to the old. This sort of Ponzi scheme works only if the number of those
paying increases at a faster pace than the number of those receiving. Given the
slowing of population growth in the United States, the Ponzi scheme cannot survive.
Something
for nothing: Many of us who receive money from Social Security or other government
programs are learning the hard way the difference between money with strings and money without
strings. For example, Social Security recipients have to be enrolled in Medicare, whether
they want to be or not. "Universal" coverage means compulsory coverage, just with prettier
political spin.
Reforming Social
Security. The canard propagated by Democrats and enabled by spineless Republicans is that any
GOP reform would rob benefits from today's seniors. The Democrats' alternative? Why, they
have none….
Medicare and Social Security: Big
Entitlement Costs on the Horizon. Today, 6.9 percent of federal income taxes go towards
the two programs. Dr. Thomas Saving of Texas A&M University, a public trustee of the Medicare and
Social Security trust funds, estimates that, in 2020, 26.6 percent of all federal income taxes will
go to paying for Medicare and Social Security. By 2030, that number will increase to
49.7 percent.
Entitlement programs threaten
western economies. A column in the Wall Street Journal makes the sensible observation that...
"unless we can exploit the dramatic demographic and economic changes that are before us, our future will be
much poorer. Instead of stepping into an easy retirement, many retirees will tumble into a future marked
by bankrupt government social programs and declining asset values that will quickly deplete their cherished
nest eggs. This forecast is not based on an unpredictable future, but on events that have already
transpired."
30 nations' lessons
for Social Security reform. Britain, Chile and many others have virtually
no unfunded liability because they reformed their pay-as-you-go Social Security
systems with personal retirement accounts.
Social Security's
Second Career: When Social Security was created in 1935, the retirement
age was set above the average male life expectancy. It was designed so the average
man would never collect any Social Security benefits, which were intended only to help
those who "outlived" their savings. Luckily, that's changed. People live longer,
and future generations can expect to do even better. But that means ever more retirees
depending on ever fewer workers. There were 42 workers for each retiree in 1945. Today
there are only 3.3. And by 2025, the ratio will drop to about two workers per retiree.
Allow People To Invest
Their Social Security Funds. Our Social Security System is truly a pay-as-you-go
system, as the assets in the so-called Social Security Trust Fund cover only a tiny percent of
existing obligations. As the number of retirees rises relative to the number of workers
as our population grows older, it will be impossible to pay existing benefit levels with the
current level of Social Security taxes in another generation or so. Young people recognize
this: surveys show that most do not expect to receive significant return on their Social
Security tax payments when they reach retirement age.
Social Security "Trust Fund": The
so-called social security trust fund exists only as a legal technicality, not as an economic reality.
Trust Fund? What Trust
Fund? The Social Security Trust Fund resides within the H.J. Hintgen Building in Parkersburg,
West Virginia near the Ohio River. The Trust Fund is stored inside the locked bottom drawer of a gray
filing cabinet controlled by employees of the U.S. Bureau of Public Debt. That drawer contains
$1.76 trillion worth of Special Issue U.S. Treasury Bonds. Each of these, 225 pieces of paper
in all, is contained in one of two white, loose-leaf notebooks that hold plastic page covers. Despite the
protective plastic, these certificates have no more financial value than the ink with which they are printed.
Social Security in Crisis.
Medicare and Social Security's combined unfunded liability is seven times the size of our economy. The
"Social Security Trust Fund" is essentially an IOU from the federal government. As such, from the
taxpayers' perspective, the Trust Fund is nonexistent.
Your
papers please…. Each American already has a national ID card — it's
called a Social Security card. The use of Social Security numbers for identification
purposes was somewhat limited until 1962, when the Internal Revenue Service co-opted it for
official taxpayer identification. Ten years later, the notice "For Social Security
Purposes — Not For Identification" was removed from Social Security cards. Currently,
SSNs are the most frequently used identifier in the U.S. They're required for credit and
banking relations, employee files, academic records, licenses and certifications, medical
records and health-insurance accounts, passports, and phone and utility accounts.
Biometrics Pinned to Social
Security Cards. The Social Security card faces its first major upgrade in 70 years under
two immigration-reform proposals slated for debate this week that would add biometric information to the card
and finally complete its slow metamorphosis into a national ID.
SSN-as-ID under scrutiny —
again. It has been known for years … just how dysfunctional the practice is of trying to
authenticate people through basic information such as residential address and SSN.
Immigrants are
stealing U.S. Social Security numbers for jobs, not profits. Camber Lybbert thought it was a
mistake when her bank told her that her daughter's Social Security number, issued by the U.S. government,
was on their files for two credit cards and two auto loans, with an outstanding balance of more
than $25,000. Her daughter is 3 years old.
There
Are No "Transition Costs" for Social Security Reform. Allowing workers
to invest a portion of their Social Security taxes through personal retirement
accounts will incur no net cost to the federal government.
A
Risk Worth Taking. There's no point in having a conservative Congress
if it's not going to work to enact conservative policies. At some point
lawmakers have to be willing to take political risks to do what's right.
All
That Work for Nothing? The system is exactly the inverse of what we've all
been told to do in planning for our retirement. Those who work hard and put money
into the system early in life, get the same as those who start paying in later on. And
as a proportion of what they've paid in, the early-contributing ants actually get less than
their grasshopper peers.
The Anti-Entitlement
Revolution. A famous 1994 poll sponsored by Third Millennium, a group that
promotes awareness of national issues affecting post-Baby Boomers, reported that more
adults 18 to 34-years-old believed UFOs exist (46 percent) than believed Social
Security will exist when they retire (28 percent). That was no fluke.
Social Security: One
Leg of a Three-Legged Stool. While Social Security forms a foundation for
retirement savings, Americans must also take advantage of corporate savings vehicles
like 401(k)s and private savings. The other two legs need our attention, too.
Retirement Savings Reforms on
which the Left and the Right Can Agree. People often make mistakes
when it comes to investing for retirement: Most Americans don't save enough,
and even those who do save typically invest in inappropriate portfolios.
Social
Security reform threatened by elitist liberals. According to public
record, one of every three members of the Senate and one out of every four members
of the House are millionaires. Despite popular stereotypes of Republicans as
the party of the rich and Democrats as the party of the working class, the wealthiest
member of the Senate (John Kerry of Massachusetts) and the wealthiest member of the
House (Jane Harman of California) are both Democrats. Of the top six wealthiest
senators, five are Democrats.
Groups
Attacking Personal Accounts Using "Rigged Calculator". Factcheck.org
raises serious questions about Left wing tactics in the Social Security debate.
AARP
and the Social Security crisis: AARP should be excoriated for enabling
and creating the Social Security financial problems for which they now claim to have
solutions. Unfortunately, AARP's "solutions" are the very same bad policies that
turned Social Security into a massive ticking debt bomb — tax increases,
benefit cuts for millions of future retirees and continued spending of every
cent of the Social Security Trust Fund.
The Ignorance
Strategy: The Democratic leadership in Congress has apparently adopted
this ["ignorance is strength"] philosophy as a strategy to defeat the idea of optional
personal retirement accounts to restructure our dysfunctional Social Security system.
Social Security's
Inevitable Future: Like a Roman Legion advancing against its enemy, Social
Security's future problems approach slowly, but their arrival is inevitable.
Social
Security Fact of the Day #28: Social Security cannot afford to pay
all of the benefits it has promised. Beginning in 2017, it will run cash
deficits that get bigger every year.
A two-percent tax
increase will not save Social Security. In order for the tax increase to
work, the new tax revenues would have to be saved and not spent — a highly
unlikely occurrence given the record in Washington over the last four decades. [In
addition,] the tax increase primarily helps the solvency of the trust fund on paper,
rather than actual cash flow problems: Social Security would still run an annual
deficit by 2023, just 5 years later than under the current system.
Are
people working under false identities at DOD? The Office of the Inspector
General of the Social Security Administration published an audit report revealing that
Defense, plus the Coast Guard (which is a component of the Department of Homeland
Security), filed nearly 6,400 W-2 forms between 1997 and 2002 that could not be
matched to known taxpayers and thus had to be dumped into what SSA calls the
Earnings Suspense File.
Noble Lies,
Liberal Purposes, and Personal Retirement Accounts. A frank
look at the Social Security status quo reveals that the program is very poorly
designed to realize liberal ideals. … The terms of the imaginary "compact between the
generations" are manifestly unfair. What is worse is that the Social Security status quo
embodies a government-perpetuated deception designed to generate its own political support
by misleading voters into believing that their payroll taxes entitle them to later benefits.
Web site:
Social Security dot org, produced by the Cato
Institute Project on Social Security Choice.
Let's get
real about Social Security and Medicare. The Social Security and Medicare
trustees have just issued their annual report on the state of these programs, and the
picture is not pretty. The combined unfunded liability, the shortfall of projected
funds available to meet projected obligations, of the two programs is around
$75 trillion. For perspective, the Gross National Product
is $10 trillion.
The Entitlement
Panic. Will America have to declare Chapter 11 because of $80 trillion in unfunded
entitlement promises of Medicare, Medicaid and Social Security? Economist Laurence Kotlikoff
believes the answer is perhaps yes unless we reform our fiscal institutions.
One
company. Every year, the Social Security Administration consigns up to 9 million
hopelessly inaccurate W–2 reports to Social Security limbo. It is called the Earnings
Suspense File, and it is the final resting place of W–2s that cannot be matched to a known
taxpayer. One company filed 33,448 of these inaccurate W–2s in one year.
How Today's
Social Security Works. This paper explains what Social Security is and
how it works. The first section explains what Social Security is and which programs
are and are not part of Social Security. The second section explains the payroll
taxes that mainly finance Social Security and how they are paid. The third section
explains what Social Security's trust funds are and are not. The fourth and longest
section discusses how Social Security benefits are calculated and who is eligible to receive
them. All of the information contained in this paper comes from Social Security
Administration sources.
Straight Talk about the Social
Security Trust Fund: Most Americans – and many members
of Congress – do not understand how Social Security works. Like most
government-sponsored retirement programs in the world today, our Social Security
system is pay-as-you-go. All payroll tax revenues are spent – the
very minute, the very hour, the very day they are received by the U.S. Treasury. Most
of these revenues are spent on benefits for current retirees. Any additional amount
is spent in other ways. But there is no funding of future benefits. No money
is being stashed away in bank vaults. No investments are made in real assets.
A dose of realism
is needed. The Levi's I wear today won't fit me when I'm seventy, and we shouldn't
expect a social insurance program designed for the 1930's to fit 21st century America.
Dirty
little secrets. There are three dirty little secrets congressional Democrats
don't want you to know about Social Security. First, Democrats want President Bush's proposed personal retirement accounts off the negotiation table
because Congress has already spent your money. That is because, in reality, there is no Social Security
Trust Fund.
Questions and Answers
About Personal Social Security Retirement Accounts: The
debate over Social Security reform has coalesced around the idea of personal
retirement accounts. PRAs are not risky and they will require no
previous investment experience.
The
AARP vs. reform: Just whose money is it? Liberals believe that all money
collected by the government is therefore the government's money and does not belong to those
that generate it. Social Security isn't any different than the other line items in
the budget. This philosophy may make sense to the AARP and those that love to control
the destinies of individuals, but it hardly makes sense to the rest of us.
Why is the
NAACP against Social Security reform? One hopes that the NAACP would see
as its mission to seek every possible way to help build black wealth, to encourage black
ownership and to strengthen black families. Introducing personal retirement accounts
would do every one of these things, yet the NAACP is opposed. Why?
NOW is
on the wrong side of the Social Security Debate. The National Organization of
Women (NOW) recently denounced President Bush's proposal to reform Social Security by giving
workers the option of diverting a percentage of their taxes into personal retirement
accounts. In a statement on the issue, NOW President Kim Gandy makes more erroneous
assertions than I can list in one article, but let's juxtapose some of her rhetoric with reality.
Rock
the Victim mentality: On the heels of the AARP, NOW, NAACP and other left-leaning
groups' hysteria over Social Security reform and personal retirement accounts, the Rock the
Vote campaign is latching on to the issue and misinforming a whole new generation.
Campaign
Misinforms Young People on Social Security Reform. Among Rock the Vote's top ten
reasons that young people should oppose Social Security reform is that the current system
is "retro chic," "politicians want to trick you" and "investments are a gamble." Their
number one reason — it's better to "visit your grandparents —
at their house" because "before Social Security, for most families, all the
generations lived under one roof." This is how Rock the Vote views their
constituency — a bunch of shallow, ditzy victims who don't want to
live with their grandparents.
MTV Poll
Masks Youth Views on Social Security. In the political Odd Coupling
of 2005, MTV's Rock the Vote has joined forces with AARP. Their
mission: Block efforts to let young workers invest some of their Social Security
taxes in personal retirement accounts.
Transforming
moral problems into politics. Listening to the case for transforming Social
Security to a regime of personal ownership is simple and compelling. The numbers no
longer add up in our current system. Personal accounts would allow ownership and
wealth creation. If we had to start from scratch, no one would want the system we
now have. If the case is so clear, why isn't it simple to change?
You're
too stupid to manage your own money. Former Democratic vice-presidential
contender Geraldine Ferraro inadvertently revealed the real reason behind Democrats'
resistance to the president's proposal of Social Security partial
privatization. "… [I]f you don't have the knowledge [emphasis added] and
the wherewithal [emphasis added] to manage your own private funds," said
Ferraro, "well, you know, you're gonna be out of luck."
The Social
Security Crisis That Democrats Actually Did Claim Was A Crisis Before They Claimed It Wasn't
A Crisis. In an excellent article on the subject of Social Security reform
titled, "The Innumeracy of it All!", the first paragraph of Donald Luskin's piece says it
all. "In the debate over Social Security reform, the dollar figures involved can be
dauntingly large and dizzyingly complex. That opens up a lot of opportunity for
demagogic mischief, and the leftist opponents of reform are taking full advantage." As
a matter of fact, the Democrats who are out there assailing Social Security reform are going
to an even greater extreme on this subject than on just about anything else they've ever set
their sights on trying to destroy.
Here's
What's Wrong with Social Security. As 2005 begins, it's time to
face facts. Social Security stinks. Government may owe a measure of
protection to retirees, but this is a terrible way to provide it. Social
Security is an absurd anachronism — and most people under 50 know it and
want something better. By its 70th anniversary, the system must get the
restructuring it desperately needs. Begin with the obvious. Social Security
is a Ponzi scheme headed for collapse.
Social
Insecurity? The latest liberal spin on Social Security is that there is
no problem. Of course, there is no problem with any obligation if you are willing
to welsh when it comes time to pay it.
Changing
values: The displacement of traditional values with the "do your own
thing" agenda puts perspective on the problems with which we're now wrestling on
Social Security and Medicare. The conventional explanation for today's
Social Security and Medicare problems is demographics. Our population
is "graying" as a result of longer lifespan and fewer babies.
Who's
afraid of Social Security reform? There is much opposition to President
Bush's plans to reform Social Security and provide taxpayers with Personal Retirement
Accounts (PRAs) that they actually own and can pass on to their heirs. Why
would anyone not want retirees to become more financially secure and receive more
money than they would with the current Social Security payments? Why would
anyone not want to get political and bureaucratic control out of his or
her life?
Social Security and Stock Market
Risk: Critics of personal accounts say the stock market is too risky for
retirement savings. They also claim workers will fare better with today's
pay-as-you-go Social Security than with personal retirement accounts. But
they are wrong.
A
Professor Gets Personal. Well-known Princeton economics professor
Burt Malkiel is providing meaningful, data-driven support of market-investing in
personal savings accounts as part of Social Security reform. His is a
significant endorsement of the Bush plan at a time when critics are
popping up all over the political map.
How to Save Social Security: Social
Security is currently running a surplus. However, these days of plenty
are in short supply. In just 15 years, Social Security will pay out more than
it collects in taxes. In each following year, the deficit will grow larger.
Is the Stock Market Too
Risky for Retirement? Since the early days of Social Security, benefits have been
financed by taxing workers' payroll. From 1937 through 1949 wage
income up to $3,000 was subject to tax at a rate of 2 percent. The $60 maximum
was all that was needed because there were many workers and few beneficiaries, a ratio
of 16 to 1 in 1950. But over the last half-century the worker/beneficiary
ratio has fallen because we're living longer and having fewer children; it is now
just 3.4 to 1.
How Big Is the Government's
Debt? As of 2001, the accumulated entitlement obligations owed
to all people (including all current workers) who have earned Social Security
and Medicare benefits is $12.9 trillion for Social Security and $16.9 trillion
for Medicare. When these obligations are combined with the debt held by the public,
the total burden equals $33.1 trillion, or 10 times the official debt measure. This
"total debt" is more than three times the size of the nation's total output in 2001, and amounts
to $116,381 for every man, woman and child in America.
CBS
Seeks To Discredit Social Security Reform. Twenty-one hours
after President Bush, in his State of the Union address, outlined his plan
for Social Security, CBS News began its campaign to discredit it. CBS's
John Roberts made no pretense of balance and "reported" a story on Social
Security reform skewed nearly entirely to the political left.
Democrats
crunched by Social Security numbers. Opening up the sacrosanct Social
Security system to private investment in stocks and bonds has never been done before,
and many Republicans are understandably skittish about whether it will
work — and what it could do to them politically if it doesn't.
Shameless
semantics. Two major changes have occurred since those long-forgotten days
when Democrats were identifying Social Security as a crisis that had to be fixed
immediately: The problem has gotten worse, and Democrats have proven they
weren't sincere in the first place.
Booing FDR: Amid
the applause, there were a few boos for President George W. Bush during his
[2005] State of the Union address. Most came from Democrats when the president spoke about
reforming Social Security.
How Will We Pay for Social Security
and Medicare?. Social Security and Medicare are making future promises much
greater than the taxes that will be collected at current rates. Unfortunately,
some policymakers seem to be intent on making the problem worse, not better. Reforms
are needed that create more saving today for retirement and increase the nation's
capital stock.
Social Security,
Women and Working Families. Social Security does not
reflect the needs of 21st century families. Further, due to
policies established in the 1930s, many women are unfairly penalized for work. These
problems should be addressed during the process of reforming Social Security in a way
that allows couples to invest some of their payroll taxes in personal retirement accounts.
Social
Security: America is on the brink of a national fiscal and retirement
security crisis. Social Security has a massive unfunded liability of $12 trillion,
and in 2018 the program runs into the red as benefits paid exceed contributions. What's
more, the Social Security Trust Fund is full of meaningless government IOUs — there
are no real assets in the "Trust Fund". If nothing is done, in just a few years
Americans will face massive tax hikes and benefit cuts.
What
should be done to strengthen Social Security? Due to demographic changes,
the ratio of workers paying into Social Security is shrinking. In the 1950's,
there were about eight working-age Americans to support one retiree. Today there
are three. In fifteen years, the ratio will be two workers per retiree.
Social Security
Basics: Americans have come to realize that Social Security faces serious
financial problems that are only going to get worse. This public concern is well
grounded. Studies and official reports confirm that Social Security is approaching
a major financial crisis, and even if its revenue and expenditures were in long-term
balance, the program is providing poorer and poorer retirement income security for the
money Americans contribute.
Answering the
Top 10 Myths About Social Security Reform: The debate over Social Security
reform contains a great deal of incorrect and misleading information. These "myths"
make it hard for workers to make an informed decision on their retirement finances and
those of their children and grandchildren.
Here's one possibility:
End
Social Security. In a free society, government exists to serve its
people. In one that is not free, people are a tool of government. By
this standard, anyone following the current debate on Social Security reform would
have to conclude that we are living in a society that is increasingly less free.
The Quest to Live Off
Others. If you're a senior citizen, you might be eligible for property
tax reductions, subsidized prescription drugs, reduced fare on public transportation,
and all manner of merchandise discounts.
What
Social Security crisis? In 1935, wealthy liberal do-gooder Franklin Delano
Roosevelt, the most notorious violator of Constitutional federalism in the 20th Century, found
a clause in that venerable document authorizing the central government to provide retirement
benefits for all Americans. Apparently, 100 years earlier, that clause did not exist.
The
Social Security Scam: The program would have been struck down as
unconstitutional but for the guile of the United States' worst president, the socialist
FDR, and a craven Supreme Court justice. Social Security is the biggest
fraud ever perpetrated, it is a welfare scheme that steals from the neediest,
and it has been a path to a police state.
19 charged with Social Security check
fraud. In one of the largest prosecutions of its kind in the country, 19 people have been
charged in federal court in Milwaukee with scamming the Social Security Administration out of
some $270,000 -- in increments of about $500. The investigation began after officials
determined that the agency's Milwaukee North office on W. Fond du Lac Ave. was among the
worst in the nation in terms of incidents of fraud.
[Among the worst?]
FDR is
dead. I have some advice for the reactionaries in the debate over Social
Security reform: Franklin Roosevelt is dead. Get over it. This notion,
that Social Security is some kind of secular tithe to the false god of FDR, is intellectually
and morally offensive. It is dishonest. Of course, liberal mythology about the
New Deal legend is, uh, legendary. Still, it's worth noting that the New Deal surely
prolonged the Depression and did far less for poverty than the textbooks claim. … It
was World War II, not the New Deal, that served to pull America out of its economic doldrums.
Social
Security: All Trust and No Fund. Various reports claim Social
Security is safe and secure. In their annual report this year, the program's
trustees insisted it would be able to pay benefits through 2042. A recent
Congressional Budget Office report is even more optimistic. It says Social
Security is solid through 2052. But these reports pretend there is money in
the Social Security trust fund, which actually is all trust and no fund.
People worried when the Social Security Act was passed in 1935 that the Social Security
number (SSN) would become an all-purpose identifier — an understandable public response,
at the time, to a rather dramatic institutional change. But government officials reassured
the public that the SSN would not be used for any such purpose. Equally important, they
showed restraint and only gradually expanded the federally mandated uses of the SSN — not
mandating its use by other federal agencies until 1943. A step at a time, during the 1960s
the SSN became the taxpayer identifier used by the IRS, the identifier for federal civilian
and military personnel, the Medicare identifier, and more. In the 1970s Congress passed
laws requiring the SSN's use for legally admitted aliens and anyone seeking federal
benefits — and also gave the states free rein to use SSNs for identification
purposes. A series of federal laws passed in the 1980s required the issuance of
SSNs to ever-younger children if their parents wanted to claim them as dependents on
federal tax forms — by age 5, age 2, age 1, now at any
age. People got used to it.
Social Security deceit: The
next big lie is from the same [1936] Social Security pamphlet: "Beginning
November 24, 1936, the United States government will set up a Social Security
account for you. … The checks will come to you as a right." First, there's
no Social Security account containing your money, but more importantly, the U.S.
Supreme Court has ruled on two occasions that Americans have no legal right to
Social Security payments.
Social
Security: Defending the cap. The cap – as technicians refer
to it – is the earnings ceiling above which US workers' income is free of
government pension taxes. Currently, workers pay into Social Security 6.2 percent
in tax on only the first $90,000 they earn.
Cap
over the wall. The Social Security trustees assume that 10 years
from now economic growth will slow to 1.8 percent — about half
the average growth rate since the Civil War — and will remain that
low until 2080. How do they know? They don't.
What
transition costs? The Democratic Party establishment is appalled at the
thought of private Social Security accounts turning ordinary Americans into owners of
stocks and bonds and, therefore, potential Republicans. The argument by Democrats that
private accounts are too risky fails the test of history. Nobody can find a 20-year
period in America when investments have not gained.
Bush
Social Security Revolution? The Social Security Act was
the signature accomplishment of Franklin Roosevelt's newly created
American welfare state in 1935. It switched the American ethos
from individual and community reliance to national government responsibility
for personal security and welfare. Its early and apparently costless
success provided the legitimacy for all of the expert-directed federal
social programs that have followed to this very day. Yet, today,
it and its entire supporting apparatus stand near bankruptcy.
Social
Security is Stealing Our Future. The AARP and the Democrats
are robbing our future in order to maintain a welfare system for the
old by blocking Social Security reform.
A
stealth tax. Although President Bush has said that he would not increase
Social Security taxes to pay for private accounts, some of his aides are floating the
idea of a stealth tax increase on the wealthy, nevertheless.
Two-faced
advice on Social Security. The Washington Post editorial page has taken to
arguing with itself over the merits of Social Security privatization.
A
Guide to the New 2004 Social Security Trustees' Report. The
Report shows that today's Social Security cannot last. Over time, the system has
promised almost $26 trillion (in 2004 dollars) more in benefits than it will have the
ability to pay. Just repaying the amount that will be in Social Security's trust fund
will cost over $5 trillion.
How
to Fix Social Security: There are only three real solutions to
Social Security's rapidly approaching fiscal problems: raise taxes, reduce spending,
or make the current payroll taxes work harder by investing them through some form of
personal retirement account.
Time To Start Over
With Social Security Numbers. It isn't just Social Security benefits that
Americans are worried about; it's the Social Security Number (SSN) itself. The widespread
misuse of SSNs is a growing political issue.
Privatizing
Social Security. Would you sign a contract that enabled the other party to
change the terms of that contract at will, while you could neither stop him nor make any
changes of your own? Probably not. Yet that is exactly what happens when you
pay money into Social Security.
Privatizing Social
Security: Part II. The key problem with Social Security is that it
has never taken in enough to cover all the pensions it promised to pay. Promises
win votes but collecting enough money to pay for them does not.
Social
Security and Its Discontents: Social Security is the largest government
program in the world. But it is also a deeply troubled one, on the verge of financial
collapse. Within 15 years Social Security will begin running a deficit. Overall,
the program is more than $26 trillion in debt. Without fundamental reform it will
not be able to pay the benefits it has promised to our children and grandchildren. That
has prompted the most far-reaching discussion of the purpose and structure of Social Security
since the program was enacted in 1935.
Kerry
Has No "Plan" for Social Security. Recently, Senator and presidential candidate
John Kerry alleged a George Bush January "surprise" of aggressive action towards "privatizing"
Social Security that will result in a future of destitution for America's seniors while the
rest of America eats cake. Mr. Kerry should have noticed that Al Gore tried the
exact same thing but was unable to fool the informed voters who know that something must be
done about Social Security's looming financial crisis.
Social Security and Market Risk: The
analysis finds that although there is a common perception that stocks are more risky than
bonds, stocks outperformed bonds in every one of the 95 periods. In
addition, all-stock portfolios almost always outperformed mixed portfolios containing
both stocks and bonds. Furthermore, the performance of the capital markets is much
better than what young people today can expect on their Social Security payroll
tax dollars.
Are Medicare and Social Security
really worth it? The 2004 Medicare and Social Security Trustees Reports
show that programs for the elderly are on an unsustainable course. The expenditures
exceed the revenues to be collected, and the funding gap is projected to grow through
time. Obligations to the elderly are more than six times the size of the economy and
18 times the size of the outstanding federal debt.
Social Security
Reform: Words Are Good but the American People Need Action. Many
people are shocked to learn the money they have been paying into Social Security over
the years — more than 12 percent of their paychecks — has never been
saved for their own retirement. — Instead, it has paid for the benefits of current
retirees, and anything left over has been spent by politicians on other programs.
Privatizing
Social Security: The U.S. Social Security system is
broke. It does not have the assets to pay promised
benefits. Unless the system is fundamentally changed,
solvency will require either massive tax increases for future
workers or draconian cuts in benefits for future retirees. Social
Security is also treating the vast majority of people who are working
and paying taxes very badly.
Save
People — Not The System. Perhaps it is presumptuous for a black
ex-welfare mom to lecture the chairman of the Federal Reserve about public
policy. However, African Americans suffer daily and disproportionately
under a broken and unfair Social Security regime.
Gaps
Exist in Laws Protecting Use of SSNs: Information resellers, credit bureaus
and health care companies routinely acquire Social Security numbers from their customers and
face few restrictions on using and keeping them.
The
criminal raid on Social Security: Unbelievably, the White House is trying to
convince us to embrace this global ripoff because it "rewards work." No, it rewards
criminal behavior. The plan will siphon off the hard-earned tax dollars of American
workers who may never see a dime of their confiscated earnings and fork it over to foreigners
guilty of at least four acts of federal law-breaking: crossing the border illegally,
working illegally, engaging in tax fraud and using bogus documents.
Investing
in Choice: I understand what it means to invest, and Social Security doesn't
come close. An investment happens when you put money into an enterprise that
makes a profit. With Social Security, the money is spent by drunken
politicians — and then replaced by higher taxes on younger people. Everyone
admits the program isn't solvent.
Frequently
Asked Questions on SSNs and Privacy
Questions
and Answers on Social Security
The
Privacy Act of 1974 is the primary law affecting the use of SSNs.
It's social, but without much
security. It's no coincidence they put the election so close to
Halloween. It helps Democrats do what they do best — scare old folks.
Social
Security: Congress should allow young workers to redirect their payroll
taxes to individually owned, privately invested retirement accounts.
Despicable!: Let it be
shouted from the housetops, over and over
again: There is no Social Security trust fund. Got that? There
isn't one red cent in the so-called Trust Fund. Nothing. Nil. Nada. It's
all been spent. All of it.
The
state of Social Security
America's Biggest Crooks:
Her Politicians. The Enron case made headlines because fraud and deception of such magnitude is
fairly unusual in the corporate world. Washington fraud and deception of a much greater magnitude doesn't
make the headlines because fraud and deception in government is standard practice. That's what's so
disgusting when politicians posture and demand that something be done to ensure honest corporate accounting
practices.
Young
and overtaxed — A Prescription for Ruin: Social Security is a raw deal for
the young. While a worker born in 1915 who retired at 65 in 1980
collected $71,390 more than he paid into Social Security, a worker born
in 1975 can expect to collect $93,486 less than she contributed.
Small-Time
Crooks: The world's largest Ponzi scheme is run, not by a corrupt
corporation, but by the United States government. The Social Security program
takes one-eighth of the income of the current generation of workers and promises
them a secure retirement — to be paid for by fleecing the next generation
of workers. Eventually, as with any Ponzi scheme, the number of new suckers
coming into the system is not enough to pay the benefits owed to retirees. This
is projected to happen in the next 10 to 15 years, causing Social
Security to go bankrupt.
Nearly 10 Percent of Foreigners are Illegally
Reaping Social Security Cards: More than 100,000 of the 1.2 million original Social Security
numbers handed out to foreigners in 2000 were obtained through fake documents, the Social Security
Administration said.
Conservative
"Truth Squad" Battles Democrats' Attack Plan on Social Security: A conservative seniors group
Thursday [3/14/2002] launched a political pre-emptive attack against the Democratic Party and its strategists
who are mapping out ways to damage Republicans on the issues of Social Security and Medicare.
The Social Security Crisis and What to Do About
It: "Social Security does not have any assets set aside for anybody's retirement. It's a
pay-as-you-go system. You and I as under 62 or under 65-year-old taxpayers pay money in, and
people who are now receiving Social Security receive that money within 30 days. It's a conduit
system. What we pay in, somebody else receives. Therefore it is dependent upon, when I retire,
another generation of people to be doing the same thing."
Social Security's No Accounts: Americans
can have a secure retirement. But lawmakers must be willing to shake up the system and start letting
people put a portion of their Social Security taxes into personal accounts that they own.
The Left's Vision of Social Security: What
drives the Home Democratic Caucus crazy is the suspicion that the commission will recommend letting people
invest part of their Social Security taxes in personal retirement accounts.
What does
the Bible say about retirement? Only recent English translations will use the word retirement,
because the concept wasn't invented until 1885.
The
Notch That Never Was: Franklin D. Roosevelt knew what he was
doing. He once said that welfare is a "narcotic, a subtle destroyer of the human
spirit." He also boasted that no one would dare repeal his Social Security
program. Sure enough, once the old folks were hopelessly hooked on it, the
Democrats have in the decades since, as they planned all along, ruthlessly and
relentlessly exploited the old folks' fear of losing Social Security.
Panel Admits Lies on Social
Security: Americans are wrong in believing a bald-faced lie that they have a legal right to
collect their Social Security benefits — Congress can stop paying anytime it wants,
says a report.
Ten
Deceptive Myths About Social Security, The Budget and the Economy.
Be an Activist for Privatizing Social Security
Social Security A repository of
all materials, released to the public by Americans for Tax Reform, pertaining to Social Security.
Social
Security Rates of Return for Today's Young Workers: (Not too good.)
The Failed Critique of Personal
Accounts: Why would anyone oppose such a highly desirable, beneficial reform for working
people? The real problem is that the personal account option would shift power and resources away from
the centralized government in Washington, and the elitists who see themselves as controlling that government,
and back to the workers themselves. That is truly what the opponents of personal accounts for Social
Security cannot accept.
Why Are They Really Against
It?: The fierce, shrill and unreasoned denunciations of allowing workers the freedom to choose a
personal account option for Social Security may impress the gullible. But those very qualities of the
critique reveal its thorough hollowness. The literally hysterical criticisms we have heard, based mostly
on outright fabrications concerning President Bush's eventual personal account proposal, seem calculated only
to shout down any true debate, which the opponents apparently fear they would lose.
Privatizing Social Security is Good for the
Economy: If President Bush successfully restructures Social Security, or even if he doesn't, the
impact on the economy will be tremendous.
Time To Start Over With Social
Security Numbers: It isn't just Social Security benefits that Americans are worried about;
it's the Social Security Number (SSN) itself. The widespread misuse of SSNs is a growing
political issue.
A Cost Benefit Analysis on Privatizing Social
Security: Privatizing Social Security won't involve transition costs. In fact,
it'll hardly cost us a thing.
"Fixing" Social
Security: As Congress debates "fixing" the Ponzi scheme we call Social Security, consider a few
things. Congress established Social Security with a little-known loophole, allowing states and
municipalities to exempt their public employees from Social Security. In 1981, two years before Congress
closed the loophole, three counties in Texas opted out and set up their own privatized retirement system.
The result? Since 1981, the counties' 5,000 public employees, while taxed at the same rate as
Social Security, enjoyed an average return on an investment of 6.5 percent, compared to
Social Security's 2.2 percent.
Questions & Answers On Privatizing Social Security.
Lessons from Chile on Social Security: To
meet the challenge of restructuring Social Security, we'd have to be a rich, advanced and developed
country -- like Chile. That's right, Chile... the third-rate third-world country that brilliantly
succeeded in 1981 in a challenge that we haven't even grasped more than two decades later. If Chile can
fix its broken and bankrupt Social Security system, so can we.
Facts Refute Democrat Myth of Needy Elders
Democrats
Scam On: The Social Security scare machine is going into full operation.
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