Posted on 02/23/2005 2:55:38 AM PST by JohnHuang2
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, 12 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 Nov. 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?
Thanks. Save for later
“Now, get this through your head. We’re going to spend and spend and spend, and tax and tax and tax, and re-elect and re-elect and re-elect, until you’re dead or forgotten.”
Harry Hopkins, trusted advisor ro Roosevelt.
Welcome
That means you will pay up to $3000 a year, not 1.5 cents on up to $3000 of income. Therefore, this is misleading. A erson making $50,000 would pay a max of $3000 in otherwords.
"First, there's no Social Security account containing your money"
That's right, and that's what is going to change. And there is no "right" to SS payments. You may get a check, but if you have other income, it may be clawed back via taxes. Tax on taxable income will never change. Having income to tax is still a good thing, which is what you will have with this plan. It, like all income you have will be taxed as you beginto draw from the account you (hopefully) saved.
Harry "The Hop" Hopkins - FDR's alter ego - it turns out was a Soviet agent (See the Venona Project papers on Hopkins).
The United States Supreme Court has ruled SS payments are a "benefit", not a "contract".
If Congress tomorrow decides to never again cut a social security check, you're shlt out of luck.
They also told us that the Social Security number would never be used as an identification number. Try doing business without one sometime.
Surprise, Surprise... democrats opposing fixing social security by any means. Why expect anything different of democrats?
OUTSTANDING POST! Thanks. Socialist Security is the greatest Forced Fraud EVER perpetrated on free people.
Walter Williams is always a must read.
No. The original SS taxable income cap was $3,000.
Ditto! And a VERY HANDSOME MAN! ;-)
This wonderful man is the epitome of wit and wisdom!
Ditto!
Cannot be said any more plainly than this! Thank you Dr. Williams!
Social Security is nothing more than a government run Ponzi Scheme and the sooner we all catch on to that fact the better!
Another GREAT POST John!
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