Vexation - thy name is Social Security

It's the gift that keeps on giving (until the funds run out)

This year, as during every election cycle, politicians will pummel us with perfervid pleas about Social Security. “Those other guys are going to cut your Social Security if you don’t vote for us!” “One of the biggest problems with government spending is entitlements, like Social Security.” “If we don’t do something, Social Security will be insolvent within the next ten years” (this has been the constant cry for the past three decades). Each has a reason why Social Security should stay or be cut. Is Social Security an entitlement? Is it facing insolvency? Why can’t the politicians fix the problems with the system?

Before attempting to answer these questions, a brief look at the history of Social Security is warranted. A brief survey of the Social Security Administration website unearths the government’s view of the development of “economic insurance.” Their perspective is certainly an interesting one, and one, which I would say is extremely flawed in its justification. They recognize that earlier organizations providing economic security for their members were trade-based and voluntary. Then they move into “English ‘Poor Laws’” which allowed the State to tax its citizens (subjects?) in order to support the poor, among whom they could distinguish between “‘deserving’” and “’undeserving’”. The Administration claims that the early settlers brought those concepts with them, though the implementations were only local.

It is interesting that, after this point, the SSA changes direction and says little other than that, as America grew more complex, “the localized systems of poor relief were strained” and that there “was some limited movement to state financing.” It’s telling, to say the least, that from there, instead of moving on to the founding fathers or the country’s founding documents, the page begins discussing a Thomas Paine pamphlet and jumps from there to the Civil War.

This begs the question: if they don’t have anything from the founding fathers regarding any type of welfare state, nor any supporting responsibility spelled out in the Constitution, from where do they assume the authority to create such a system? If the founding fathers thought such welfare was necessary - and those in support of the program, as well as many other government programs and policies, often wrongly lean on the “general welfare” clause of the Constitution (or the Constitution’s preamble) for approval - why did it take over 150 years after the country’s founding, until FDR and the Great Depression, for any such system to be discussed and implemented?

The answer is simple: the founding fathers supported no such system, especially as coming from the central government. James Madison himself stated, “Charity is no part of the legislative duty of the government.” From a scolding by one of his constituents, Davy Crockett learned that tax money collected by government was “not yours to give.” It seems none of this Constitutional and foundational history is sufficient to stop those elected (or the general populace) from misunderstanding and abusing the General Welfare clause, which was written in reference to the welfare of the Union and of the States - not of individuals. This percipience may be obtained by looking back to the general welfare as it is referenced in the Articles of Confederation (another post on that is forthcoming). Not to mention, Social Security is not concerned with general welfare - it is concerned with individual welfare.

The fact is, the Constitution affords the federal government no authority for such things as Social Security and Medicare. They should not exist. That said, Social Security does exist, so we must address it and the questions posed earlier.

Is Social Security an entitlement, as I recently listened to a U.S. Representative say as he, in a local speech, discussed the largest problem with government spending being entitlement programs? Most people would be surprised to find out that it both is and isn’t an entitlement. Wait…how can that be? Though most believe Social Security to be a program into which they are compelled to pay, and from which they expect to be paid retirement benefits (which is not mistaken), there is more to it - much more.

The original Social Security Act of 1935 included grants to the States for old age assistance, federal old-age benefits, unemployment compensation, aid for dependent children, maternal and child welfare, and monies for public health services. So, while it is, in part, a government-mandated and government-(mis)managed retirement savings plan, it does, in fact, contain entitlement provisions. Beyond even those listed here, the program has, over time, been modified and expanded, to where now even illegal immigrants may receive funds from the program.

So, with insolvency looming, why doesn’t government fix the program? First, Social Security serves as a slush fund for Congress to raid whenever they have unbudgeted expenses. It’s the biggest Ponzi scheme in history foisted upon the largest number of people of any such con. Social Security makes monsters like Madoff appear amateurish. Second, Social Security is too powerful a bargaining chip at election time. As I stated at the opening of the discussion, you will hear this year (as you do in every election year) about which politicians want to cut Social Security benefits, who will save you from losing them, what needs to be done to prevent the program going bankrupt, all in the name of why you should vote for “me.”

I actually believe there is a way to relieve ourselves of the vexation known as Social Security, but many, both politicians and public citizens, would balk at the idea. In my opinion, if the government believes it has tens of billions of dollars to send to Ukraine, instead, use that money to pay out, with interest, everyone who has paid in to Social Security and shut it down. One counter-argument to such a plan is that we don’t have those tens of billions of dollars to spend (and they would be right), which would imply the government should also not be seeking to send that money to Ukraine. Others would argue that it is a heartless plan, as those who are not paying in, yet are receiving Social Security benefits, would be left without. I do feel for them, but government forcing people to pay to support others is wrong; doing so is theft. Any such support should be voluntary, through family, charities, and religious organizations; not at the end of a government gun barrel. If government is to handle it, it should be at the State or local level, not at the federal level.

Social Security poses a serious conundrum, especially since it never should have existed to begin with and has come to be so heavily depended upon (by government as well as recipients). We all know how good the government is at managing money (please, please, please tell me you hear the sarcasm in that), so it is bound either to consume all available resources (as it already does), or to fail (as government programs generally do), while government continues to pour funds into it to “save” it. This vexation must end, the only question is how and when that end will come.