Social Security Scam

The current debate over the FICA tax holiday is an opportunity to shed some light on the Social Security scheme.

I hear Leftists repeatedly misrepresenting SocSec to the point where they own the terms of the debate.

A representative of some beltway organization lied that the SocSec trust fund has so many trillions of dollars and is solvent for another twenty years or more. He also pretended that there are actual accounts with actual value guaranteed to workers who have 'contributed' to the program.

Of course, none of this is so.

The 'trust fund' holds non-negotiable Treasury bills. The tax dollars used to buy those bills went into the Treasury general fund (that's the one that is $14T in the hole and borrowing over $1T per year. In other words, there is no money there waiting to redeem those Treasury bills. Might as well be Solyndra stock or an MT Global account.

There is no contractual or fiscal relationship between the dollars we have paid in FICA taxes and what we may be given in SocSec payments. Your FICA taxes are a percentage of your income based on the law at the time. Your SocSec payments will be based on the law at the time. The fact that AARP and others can convince so many uninformed Seniors that the Congress can 'take away' or reduce their current SocSec 'benefits' should be proof enough that you have no contractual claim to your contributions. Your 'benefits' are subject to Congressional and regulatory decisions. If your FICA taxes had actually bought Treasury bills or bonds, you would own that portion of the federal debt. The interest on those bills would have been set when they were issued and the proceeds would be yours. The Treasury or Congress would not have the authority to change the terms of the debt you purchased. If your FICA payments had gone into an annuity, the insurance company would be contractually obligated to annuitize the value of the policy and pay you the contractually agreed to amount. The insurance company would not have the authority to change the terms of the contract.

Simply put, none of us OWN our SocSec accounts or the federal debt in them. They are ledger entries, at best.

Next lie: Republicans want to destroy Social Security and let old people die in poverty. Well, no. Some Republicans do, but they are the ones who don't want to act to save a social safety net by allowing SocSec to continue on reformed. Conservatives and responsible Republicans (but I repeat myself) recognize the moral necessity of a true safety net for those who need help. But they also recognize that SocSec is no longer filling that role, while it is consuming unsustainably larger portions of the nation's wealth.

Now that the Left has shown everyone that there is nothing magical about SocSec 'contributions', maybe we can have the conversation necessary. SocSec was based on an industrial society with a growing population. Life expectancy was 20 years or more less than today. There was no such thing as a 401K or IRA. The situation has changed. The program ought to change to fit the current situation.

How anyone can call themselves "Progressive" when they fight to the death to resist updating an 80 year old program is a mystery to rational people.