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Why the Government Lies About Social Security - by Ron Paul

Written by Subject: Economy - Economics USA
by Ron Paul
Perhaps the biggest media story of 2010 was the influence of Tea Party voters on the Congressional landscape. The new Congress comes to Capitol Hill with a mandate to end profligate spending and restore fiscal sanity in Washington, we are told. But when the House and Senate convene in January the newly elected members will face tremendous pressure to maintain spending levels for entitlement programs. Even the most modest proposals to trim Social Security or Medicare spending will be met with howls of indignation and threats of voter revolt. Legislators who propose any kind of means testing or increased retirement ages can expect angry visits from senior citizens and lobbyists ready to fund a candidate back home who supports the status quo.

But millions of Americans now realize that the status quo is an illusion that will not last even another 10 or 20 years. The federal government cannot continue to spend a trillion dollars more than it collects in revenue each year because we are running out of creditors. Fiscal reality is setting in and the consequences may be grim, even if Congress finds the courage to take decisive action now.

Courage begins with a commitment to see things as they are, rather than how we wish they were. When it comes to Social Security we must understand that the system does not represent an old age pension, an insurance program or even a forced savings program. It simply represents an enormous transfer of payment with younger workers paying taxes to benefit the other beneficiaries. There is no Social Security trust fund and you don't have an account. Whether you win or lose the Social Security lottery is a function of when you happen to be born and how long you live to collect benefits. Of course young people today have every reason to believe they will never collect those benefits.

Notice that neither political party proposes letting people opt out of Social Security, which exposes the lie that your contributions are set aside and saved. After all, if your contributions are really set aside for your retirement, the money is there earning interest, right? If your money is in your account, what difference would it make if your neighbor chooses not to participate in the program?

The truth of course is that your contributions are not put aside. Social Security is a simple tax. Like all taxes, the money collected is spent immediately as general revenue to fund the federal government. But no administration will admit that Social Security is nothing more than an accounting ledger with no money. You will collect benefits only if future tax revenues remain high. The money you paid into the system is long gone.

My hope is that at least some members of the new Congress will cut through the distortions to see Social Security as it really is. The best way to fix the impending Social Security crisis is also the simplest: Allow younger individuals to opt out of the program and use their tax savings to invest privately as they see fit. This is the true private solution. Your money has never been safe in the government's hands and it never will be.

8 Comments in Response to

Comment by David McElroy
Entered on:

Keith, Thank you for offering to meet with me. I was once central to the Arizona Breakfast Club, managing day-to-day business as secreatary six years after founder Harry Everingham retired. But I live in New Mexico now, and don't see well enough to drive any longer.

While it is true you may not be legally liable for your parents, and your relationship with them is your business, I recall "charity begins at home". And subscribing to the Holy Bible,  churches also have a duty to assist those in need.  Where is the love in a land that callously discards the elderly after stealing their money and kicking them them to the curb when they are no longer working?  Obamacare has the socialist solution and "End-of-Life" plans.

Powell,  Many of us certainly did not know the fraud being perpetrated by Congress as Social Security and Medicare. And by the time we find out, it is too late, and we generally feel powerless to do anything about it. Ever try to get a job without a Social Security number? I did. Just because the tyrant conducts business with fraud and intimidation does not mean we should punish the victims and excuse the criminal. Uncle Sam deserves the death penalty as far as I am concerned.  We need to remember the "Spirit of '76" in America! 

I was a chaplain to hospitals and nursing homes, and I am appalled at how America treats the elderly and infirm. I guess the American way today is simply to "Take the money and run," leaving elderly victims to suffer and perish in neglect. One day, you too will no longer be vigorous and alert. Beware!  

Comment by Powell Gammill
Entered on:

If a person is a victim of theft are they entitled to taxpayer compensation for their loss? 

If they allow the armed robbery of their earnings to continue unremarked for decades are the victims entitled to taxpayer compensation for their loss?

If the armed robbers promise to return the booty down the road with interest in return for cooperation in the theft, are the victims entitled to force their children to compensate them for their responsibility in protecting their own property from theft?

Say aren't the taxpayers being robbed by the same robbers to compensate the victims for their loss?

So I guess the taxpayers who won't protect their property from theft, are expected to compensate the Social Security buzzards who equally didn't put up resistance to their theft.  Cowardice expects to be rewarded.  Is this a lesson from Mom and Dad?

Comment by Keith Cyrnek
Entered on:

McElchap, I will be at the breakfast club on 1/8, we can talk further if you want. I am not responsible for my parents and no one is responsible for me. Obama has nothing to do with my health. I don't endorse the gov't. I waste too much time on FP, because I already know the truth. Peace out McElchap.

Comment by David McElroy
Entered on:

 Keith;  Why do you persist in bashing seniors who expect to get what they paid for, instead of lashing out at the crooks in the District of Criminals who deceitfully operated Social Security as a ponzi scheme?  As for them getting more than they paid in, pay attention:  After paying in for about 50 years, some considerable interest should accrue.... and the value of the dollar has shrunk by a large margin since I was 16 years old and signing up for Social Security. If you endorse the dishonest way government is cheating senior citizens, just remember you will be old one day if you survive the Obamanation. By the way, how are your parents doing?  Are you going to refuse them care like Obama?

Comment by Keith Cyrnek
Entered on:

TO: Rocky and McElchap: Don't believe your gov't. They lie. You are not entitled to anything. They were lies then and bigger lies today. The medical industrial complex was dead weeks after Ike signed the bill in '64. 95%+ seniors get more "entitlements" than they ever put in. You have no right to be taken care by anyone or anything and you definitely will not get bailed out.

Comment by Stupid Amerkin
Entered on:

Government? Typo error. How about regime and what don't they lie about? 

Comment by Rocky Frisco
Entered on:

Personal message to Ron Paul, Coburn and the rest of you criminals and traitors: 

"Stop all of the bogus, murderous, unnecessary wars totally fucking dead before you touch a penny of my hard-earned benefits."

-Rocky Frisco

Comment by David McElroy
Entered on:

 Mr. Paul:  WHERE IS THE JUSTICE? Why not prosecute this fraud against America's seniors?  Yes, I agree our money is NEVER safe in the lying, cheating, theiving hands of deceitful murderous government.  I agree younger people should opt out and phase out the ponzi schemes.  But Social Security and Medicare were sold to the people as "insurance" programs for care in their old age, and now we're just supposed to walk away with our heads down after congress after congress has looted the funds we we were forced to pay? After paying for these programs for about 50 years, we are ENTITLED to what we paid for.  The fraud should be prosecuted and heads should roll.  The elderly should not be left up the creek without a paddle.  Of course, Obama's "rationed" healthcare will ease the problem, as dead people don't get paid. Where is the justice, Mr. Paul? We've been robbed!