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Social Security Deceit

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Well-known member
Feb 14, 2005
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Southern SD
Social Security deceit
Walter E. Williams

February 23, 2005

President Bush's call to allow Americans to take a portion of the money they pay as Social Security taxes to set up private retirement accounts has to be a good idea. Why? The more of what a person earns that's in his pocket and under his control, the better off he will be. At a later date, when the details of the president's plans are known, I'll address the various reform plans under debate. For now, let's look at some of the gross political deceit, lies and unkept promises that have become a part of Social Security.

Here's what a 1936 government Social Security pamphlet said: "After the first 3 years -- that is to say, beginning in 1940 -- you will pay, and your employer will pay, 1.5 cents for each dollar you earn, up to $3,000 a year. ... Beginning in 1943, you will pay 2 cents, and so will your employer, for every dollar you earn for the next 3 years. ... And finally, beginning in 1949, twelve years from now, you and your employer will each pay 3 cents on each dollar you earn, up to $3,000 a year. ... That is the most you will ever pay."

Had Congress lived up to those promises, where $3,000 was the maximum earnings subject to Social Security tax, controlling for inflation, today's $50,000-a-year wage earner would pay about $700 in Social Security taxes, as opposed to the more than $3,000 that he pays today.

The next big lie is from the same 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.

In Helvering v. Davis (1937), the court held that Social Security was not an insurance program, saying, "The proceeds of both (employee and employer) taxes are to be paid into the Treasury like internal-revenue taxes generally, and are not earmarked in any way."

In a later decision, Flemming v. Nestor (1960), the court said, "To engraft upon Social Security system a concept of 'accrued property rights' would deprive it of the flexibility and boldness in adjustment to ever-changing conditions which it demands ... " That flexibility and boldness mean Congress can constitutionally cut benefits, raise retirement age, raise Social Security taxes and do anything it wishes, including eliminating payments.

If a private retirement company reneged on its promises, we could take it to court. If Congress reneges on its promises, there's no judicial course of action whatsoever.

Vital to any Ponzi scheme, like Social Security, is the ability to recruit as many suckers as possible. In 1999, a little noticed part of President Clinton's plan to "save" Social Security was to force 5 million previously exempted employees into Social Security. If they were forced into Social Security, it would have created billions in additional revenue. Guess what. Twelve senators, including five Democrats -- Dianne Feinstein (D-Calif.), Barbara Boxer (D-Calif.), Christopher Dodd (D-Conn.), Richard Durbin (D-Ill.) and Edward Kennedy (D-Mass.) -- descended on the White House to demand that President Clinton not support forcing 5 million of their constituents into Social Security. They warned of the adverse impact on employees in terms of lower rates of return and lost flexibility.

Isn't that great? These are the same politicians who are now resisting President Bush's call to allow Americans to take a part of their Social Security taxes to put into private retirement accounts. If they'd go to bat for those 5 million workers to remain out of Social Security, to avoid the adverse impact of lower rates of return and lost flexibility, why would they fight to deny tens of millions of workers a right to use a portion of their taxes to do the same?
This is just a thot, but years ago, my husband said it would be great if we could put this SS money into our own investment fund, then maybe we could have a nest egg. Now, as I understand it, us old folks would have to live another 68 years to collect what we have paid into SS. Highly unlikely!! :eek:
What if the SS committee were to say that folks could put this money into specified types of accounts ie..retirement accounts and not into the stockmarket or get rich quick stuff? This seem reasonable to me! At least the young people coming up would have a chance to have something.
Also...what about this "Golden Fleese" thing I have been hearing about? The Congressional representatives don't have to pay into SS, they continue to get their pay for life and all on the tax payers back??????????? If these people were added to the SS rolls, bet this thing would get "FIXED" in a hurry! If this is true, the Congress doesn't WANT to fix it as they will no doubt get caught up in the fixing and lose their rich for life status!!!
I wish I could be rich for life, but so far I have won a tape diskett from Publishers Clearing House (Entertainment Center), $150 playing bingo at a local bar and a testing prize from Genaissance at NCBA Convention. We are looking at every 10 years here!!! :?
Getting too long.........Later CW

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