Magazine article Insight on the News

Nation's Youth Pay High Price for the Social Security Scam

Magazine article Insight on the News

Nation's Youth Pay High Price for the Social Security Scam

Article excerpt

It's hard to top Social Security as a sheer political scam with deadly economic consequences. It has imposed a prosperity-crushing tax bite, promoted financial irresponsibility and torn apart the generations. It has turned many of our elders into moneygrubbing lobbyists, and expanded government's reach beyond what any free society should tolerate. Adding assault to battery, it doesn't even provide security.

Washington should listen to the generation that picks up the tab. A new poll by the group Third Millennium says that only 9 percent of Americans ages 18 to 34 believe Social Security will be able to pay them anything. Three-fourths don't believe the program will exist by the time they retire.

The younger generation pays nearly as much into the program as it does in personal income tax. The Social Security income tax is masked by calling it a "contribution" (no, President Clinton didn't invent this euphemism) and making employers pay half, which still comes out of the employee's paycheck.

When the program began in 1937, Social Security revenue amounted to 10 percent of total government take. Soon it will soon reach 40 percent, most of the growth having taken place since 1970. The program raises more than four times as much money ($479 billion) for the federal government as the corporate income tax ($118 billion), and only 15 percent less than the income tax itself ($562 billion). In 1950, the Social Security budget was one-seventeenth the size of the Defense Department's. But since 1991, it has surpassed the military as the largest program in the federal budget -- a dubious honor.

The myth survives that current payments are stored in a "trust fund." In fact, today's workers pay today's retirees, with any spare money handed to the Treasury for immediate spending. The financial instruments received in return are simply claims on the hapless taxpayers of the future.

Nor is Social Security an annuity, for there is no payment difference for people who are going to live longer. There is only an arbitrary benefits formula slightly connected to what was paid. In short, the program has more in common with insurance fraud than market insurance.

Social Security also manufactured a phony "right" to leisure from age 65 onward. In 1930, that age surpassed the average life expectancy, which was 58 years for a man and 61 years for a woman. …

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