Social Security, Broken Promises and Dreams from the Biggest Rip-Off Ever Foisted on America by Liberals
A few weeks ago I received one of those chain e-mails from my mother-in-law. You know the ones. They often fly fast and loose with the facts in order to disparage a cause, person or political party. This one happened to deal with the utter failure of the Social Security program. And as is typical, this one made some pretty wild claims. But as is almost always the case, these e-mails circulating in cyberspace often have their basis in fact. So, I began to dig a little deeper. What I discovered about the origins of the Social Security program, and the litany of broken promises made by said program, lead me to believe that liberals never intended it to be a safety net. It was merely a net, a net designed to enslave the American population into government dependence and to defeat America’s tradition of individual liberty and self-reliance.
Many reading this article may find it hard to believe that the American people ever bought the sales job I’m about to detail for you. But remember, back then the people trusted government. They didn’t have the 24-hour news cycle and glowing figures of corruption like William Jefferson, Maxine Waters, Chris Dodd and Rod Blagojevich. Plus, the people were not constantly reminded of famous political promises broken like “Read my lips, no new taxes,” or “When there’s a bill that ends up on my desk as president, you the public will have five days to look online and find out what’s in it before I sign it,” or “This will be the most ethical Congress in history,” or “This 110th Congress will commit itself to a higher standard. NO NEW DEFICIT SPENDING.” I had to include two quotes from outgoing Speaker Nancy Pelosi. She’s broken so many promises it was hard to choose.
I started off my research at the inception of the Social Security program. Read for yourself the brochure that announced this new government entitlement to “We the People” back in 1936.
It’s titled “Security in your old age.” It’s addressed to workers and businesses all over America. When reading this I was reminded of the old saying, “If it sounds too good to be true, it probably is.” The first sentence sounds innocent enough. “Beginning November 24, 1936, the United States Government will set up a Social Security account for you, if you are eligible,” it reads. But here’s where Americans of today will scratch their heads and wonder aloud why this program sounds nothing like the compulsory redistribution of wealth system we have today. The brochure outlines the following:
For the first three years, starting in 1937, both employer and employee will pay 1 cent for every dollar the employee earns, up to $3,000 a year.
The next 3 years, starting in 1940, employer and employee will pay 1.5 cents for each dollar the employee earns, up to $3,000 a year.
The next 3 years, beginning in 1943, both will pay 2 cents for every dollar earned, up to $3,000.
After that each pays 2.5 cents for three years up to $3k. And finally, beginning in 1949, twelve years from the start of the program, both employee and employer will each pay 3 cents on each dollar earned, up to $3,000 a year.
The section ends with this PROMISE: “That is the most you will ever pay.” The pamphlet concludes saying that the taxpayers´ money will go into a fund where it will earn 3% interest. And, “What you get from the Government plan will ALWAYS be more than you have paid in taxes and usually more than you can get for yourself by putting away the same amount of money each week in some other way.” By now you’re probably getting that sick feeling in your stomach as I did upon reading this. The queasiness came when I realized NONE of these promises were ever kept.
The Heritage Foundation did some fantastic analysis on the Social Security system back in 1998. They found that Social Security pays a very low rate of return for two-income households with children. The rate of return is only 1.23 percent for an average household of two 30-year-old earners with children in which each parent made just under $26,000. Those couples will pay a total of about $320,000 in Social Security taxes over their lifetime (including employer payments) and can expect to receive benefits of about $450,000 (in 1997 dollars, before applicable taxes) after retiring at age 67, the retirement age when they are eligible for full Social Security old-age benefits. Surprising to most, the rate of return for some ethnic minorities is negative. I say “most” because conservatives instinctively know that liberal policies always have a negative impact on the poor and disadvantaged. Look at Obama’s economic policies. Low-income earners have suffered lost wages and lost jobs. Due to his “soak the rich,” policies, charities are strapped and can’t provide help for those in need.
So it is with Social Security. Low-income, single African-American males born after 1959 get a negative rate of return from Social Security. For every dollar he has paid into Social Security, a low-income, single African-American male in his mid-20s who earned about 50 percent of the average wage, or $12,862, in 1996 can expect to get back less than 88 cents. This negative rate of return translates into lifetime cash losses of $13,377 (in 1997 dollars) on the taxes paid by the employer and employee. Though the research is over a decade old, we all know the situation with this massive entitlement program hasn’t gotten any better. In fact, it’s worse.
When our current economic crisis hit and the stock market tanked, know-nothing liberals hit the airwaves to remind Americans how fortunate they were that the government was managing their money in Social security. The chief liberal, President Obama, said in a recent town hall meeting in Columbus, Ohio, "It will not be privatized as long as I'm president." The president further noted that the economic recession and Wall Street collapse would have devastated the savings of retirees under a privatized Social Security system. What the president failed to mention was that those “devastated” retirement accounts would still outperform Social Security. Remember that the best Americans can expect from Social Security is a little over 1% rate of return. Historically stocks average a 10-12% rate of return over a 30-year period, a person’s working years. The advantages go beyond the percentages. Compound interest is a way to build wealth for the everyday American. There’s a convention called the “rule of 72.” It states: take the rate of return on investment, divide it into 72, and that’s how many years it will take your money to double. Using the 12% rate of return, because it divides evenly, it will take 6 years for a person’s money to double. Compare that with Social Security’s paltry 1% that allows doubling every 72 years. But forget stocks. How about putting the money into a long-term CD? Even at 3%, the rate of return would allow more Americans to double their investments in 24 years rather than having to wait 72 years. But for some odd reason, liberals refuse to give Americans control over THEIR OWN MONEY!
Imagine what would happen if Americans demanded that their government stopped dumping their money into the failed Social Security system. The minimum wage workers of today could build real wealth with their hard earned money, and in turn leave that money to their children. We could put a huge dent into, if not break, the poverty cycle within a generation … no huge government entitlement program needed. If allowed, we Americans can succeed by ourselves. But liberals refuse to allow that. Conservatives have even said that the privatized Social Security program could still be mandatory. This would be done to allay the fears of liberals that all Americans secretly want to squander their retirement money on a big screen TV and a new car. Ever notice how liberals think we’re all too stupid to handle our own money? Still liberals refuse. One has to wonder why these people find it so offensive to give Americans control over their own money. The dirty little secret is that Social Security money is no longer yours. Once it leaves your paycheck and you can no longer determine its use, it stops being yours. It belongs to Uncle Sam. And until the American people say in a unified voice, “ENOUGH,” politicians will continue to exercise that control over us as we become our most vulnerable, in our old age.
Social Security is and always has been a mechanism to redistribute wealth and to exercise government control. Today government taxes far more from the productive in our society and redistributes it to those that are not as productive. And every election cycle liberals dishonestly cry that conservatives want to take away senior citizens´ Social Security. Government controlled Social Security robs the poor of the ability to break the poverty cycle for future generations. Our budget is over $3-trillion. I’ve long advocated cutting spending in useless, redundant, or failed government programs and using the saved money to pay down our debt and buy future generation’s freedom from the bondage of Social Security. We must live up to our promises to our citizens that participated in this RIP-OFF in good faith. That’s why it will take decades to slowly free Americans from this scheme that would make Charles Ponzi proud.
The liberals who defend this corrupt program ought to be ashamed. It takes a special kind progressive to saddle his or her grandchildren with the expense of paying for their Social Security. I don’t know about you, but I want to be the one that takes care of my children and grandchildren. I want to work hard to make sure my retirement is paid for by me, not by my kids. My government should help me, not stand in my way. We’re told that a movement has started in Washington after the 2010 elections. It’s a movement to reform our spending and get our fiscal house in order. We’re also told that entitlement reform is “on the table.” We’ll see. As I’m watching these lawmakers I can’t help but remember a generation in our not-too-distant past. A generation that was, like us, fearful and struggling to come out of an economic downturn, a depression that was also prolonged by progressive policies. I can’t help but wonder if this current crop of lawmakers will finally make it right and atone for the BIG LIE that has been Social Security.