Social security is not a retirement account, it is welfare just like food stamps et al, and is subject to the whim of the DC politicians.
Many people believe that Social Security is an “earned right.” That is, they think that because they have paid Social Security taxes, they are entitled to receive Social Security benefits. The government encourages that belief by referring to Social Security taxes as “contributions,” as in the Federal Insurance Contribution Act. However, in the 1960 case of Fleming v. Nestor, the U.S. Supreme Court ruled that workers have no legally binding contractual rights to their Social Security benefits, and that those benefits can be cut or even eliminated at any time.
Nestor sued, claiming that because he had paid Social Security taxes, he had a right to Social Security benefits.
The Supreme Court disagreed, saying “To engraft upon the 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.” The Court went on to say, “It is apparent that the non-contractual interest of an employee covered by the [Social Security] Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits is bottomed on his contractual premium payments.”
The Court’s decision was not surprising. In an earlier case, Helvering v. Davis (1937), the Court had ruled that Social Security was not a contributory insurance program, saying, “The proceeds of both the employee and employer taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way.”
In other words, Social Security is not an insurance program at all. It is simply a payroll tax on one side and a welfare program on the other. Your Social Security benefits are always subject to the whim of 535 politicians in Washington.
Well said sir. Well said.
It is unfortunate that most Americans don’t/won’t understand your presented facts. SS is an entitlement program akin to Medicare/Medicaid, unemployment and so on and so forth. Besides, those SS dollars have already been spent on other Federal programs the ‘masses’ demanded but couldn’t/wouldn’t pay for.....
“”Facts are stubborn things”, but not nearly as stubborn as a social security recipient who believes that his monthly check is an earned right.
I’m with you 100%. As a matter of fact, I just used Fleming v Nestor yesterday in response to a viral ‘Save SS’ email.
I understand completely the SS Ponzi scheme and never believed that it would be there when I retired. It is not mathematically possible.
I’ve operated a small business for the past 20+ years. I’ve always been a ‘Saver’ and lived within my means. I understand completely what ZIRP is doing to the money I’ve tried to save. And now this?
I don’t necessarily blame the 535 as much as the voters with their hands out that put them there.
I once tried to reach a government class the facts you just related. They.most of them anyway, didn’t want to believe it. That was because their parents believed it. The whole course of their economic lives would have to change if the stopped believing that they might not get a social security check when they got old. Having them read the two cases you cite did not persuade them. They thought they OUGHT to get those checks.
I have pointed these facts out to people that think their SS contributions are secure, unlike “greedy wallstreet investors”. They are usually shocked.