By Bill Jaeger
Bill Jaeger is an overseer of the Hoover Institution at Stanford University, a tax lawyer, and was administrative assistant to Nevada Sen. William F. Knowland.
Those Americans under 55 with a job are VOSSS, Victims of the Social Security System. They get taxed out of 10 to 12 percent of their wages, in order to pay for some other guy's retirement. Only recently they have come to realize that when it's time for them to retire, or soon thereafter, there won't be anyone still paying for their retirement.
This sounds alarmist, but for how long will sane people under 55 keep paying into a system that gives them nothing in return but worthless promises? Only congressional power brokers whose twisted minds remain "inside the Washington Beltway" still believe that American taxpayers will continue to fund any program they endorse. If the VOSSS folk think the system is broken, it's broken; once they start voting that way, it's over.
Of course we all hear about a Social Security Trust Fund established to pay for the retirement "insurance" we are "earning," with a present surplus of payroll taxes in excess of retirement benefits that goes into the fund, and that these surpluses will last at least a dozen more years, and the system will remain "solvent" another 20 years after that, so we needn't worry about a potential problem way out in the future. But look who's making these "optimistic assurances." They're the SSS, Social Security Stalwarts in Congress, who have "everything to gain and nothing to lose" from keeping the system going. (Congressional salaries and retirement payments are exempt from the Social Security System). In fact, these SSS are the only winners in this scam called Social Security, and its members are just praying that their scam won't be understood until they are no longer in office.
Here's how this "insurance" scheme works: The SSS tell you that your payroll taxes are going into a trust fund, that the fund pays out current retirement benefits to elders and "invests" the surplus funds it is now collecting in "Government Securities" to "build up" that fund to pay for future retirement benefits. What the SSS won't tell you is that too many of those same members of Congress are binge spenders who have an unhealthy craving to spend other people's money on non-essential programs and projects unlikely to attract local financing, frequently put forth as bait to attract those locals most easily addicted to local federal spending. These spenders have come to understand that they can no longer spend it if it would appear to increase the national debt, so they create the illusion that they are spending surpluses, $150 billion of the annual Social Security surpluses, year after year. However, the "Government Securities" the Fund is investing in are nothing more than promises that the U.S. Treasury will pay its bondholders in the future, provided future Congresses will raise the money to make those payments. Get it? The SSS in Congress use the surpluses every year for their own purposes, make the U.S. Treasury issue bonds to borrow enough to cover the amount, and dump the future bond payment problem off on Congresses yet to be elected.
Can the SSS keep getting away with this phony-baloney? It surely has AARP and people over 55 worried that they could lose their "promised" benefits, and those folks should be worried. They should be worried that those under 55, who never promised anyone they'd remain in the system, will rebel against a continuing 10 percent tax on their pay and decide to vote for some new-age Congressional candidates who promise these younger workers to get rid of the "unfair" payroll tax. By continuing to finance the Social Security System through payroll taxes, Congress has set up a serious clash between the generations, where the young far outnumber the old, and are now suddenly coming to understand their need to become more politically active to get themselves out of this tax trap. As a "solution" to the inevitable collapse of the system, the SSS advocate increasing payroll taxes, but that would only increase the political will of the VOSSS people to get out of the System that much sooner.
The way Congress can get us out of this mess is to find another way to finance the retirement of those over 55, and show those under 55 how to finance their own retirement. You hear scary numbers in the trillions of dollars that it will take to do this, but delaying the inevitable only saves those in the SSS the need to face the huge embarrassment they have brought upon themselves. Any delay will additionally cause the federal debt to spiral up and up without many prospects of benefits except to those binge spenders among the SSS. Of course Congress can solve the problem if it wants to get real; just sell off a couple of our national forests, a few dozen miles of government-owned ocean-front property, one or two "downtown" military bases, and some oil rights in Alaska's wilderness, and financing the problem becomes easily manageable. Delay that solution for 20 more years and Congress would then have to auction off all our national forests, all government ocean-access properties, all the military bases located on prime real estate, and open up the rest of its off-shore oil fields to pay for their fiasco.
The Social Security System was not always a scam. When it was started the unemployment rate was near 25 percent, and without immediate aid people were actually starving. President Roosevelt found the money to pay the older unemployed by taking it from the only place it then existed, the wages of those who were employed. Early Social Security benefits were paid for on a collect-as-needed basis until the 1980s when some clever "con-men" in Congress, now the SSS, convinced enough of their bench mates that creating an apparent surplus in the system was really a good thing. Don't be upset with yourself if you haven't already discovered the scam in their scheme; neither have a lot of otherwise intelligent members of Congress.
