One of the things that has long fascinated me about Social Security is how its proponents portray themselves as “caring and compassionate” for favoring this socialist program.
Social Security, like all other welfare-state programs, uses the coercive apparatus of the federal government — specifically taxation on income — to take money from younger people to give it to older people. There is nothing voluntary about taxation. If you refuse to pay your federal income taxes, the IRS and Justice Department will come after you with a vengeance with audits, liens, attachments, garnishments, harassment, arrest, prosecution, incarceration, and fines.
How can a system that is based on the initiation of force (i.e., taxation) entail care and compassion? Don’t care and compassion come from the willing and voluntary heart of individuals rather than from an IRS gun pointed at taxpayers?
Proponents of Social Security respond, “No, Jacob. Social Security is not a socialist program. It’s a forced retirement program. By paying our FICA taxes for 40-50 years, the money is there when we retire. We are just getting our own money back.”
But that’s just self-delusion. Those FICA taxes were spent a long time ago, specifically during the year they were collected. That money is gone forever, just like other all tax revenue. It was never deposited into a retirement account. It was never put into a lock box. From the very beginning, Social Security has been a socialist program. After all, they don’t call it “Social” for nothing. The program is based on using the tax system to forcibly take money from younger people in order to give it to older people. According to Wikipedia, the very first Social Security recipient, a woman named Ida May Fuller, paid a total of $24.75 (equal to $423 in 2023) and received $22,888.92 (equal to $497,793 in 2023). The vast amount of money she was receiving was coming from the taxes that were being collected from younger people.
President Franklin D. Roosevelt signs the Social Security Act on August 14, 1935.
Let’s imagine two 40-year-olds, one named Luigi and the other named Mario. They both earn $50,000 per year. One day, Luigi says to Mario, “I wish to retire now so that I can enjoy life. I demand that you give me $25,000 of your annual salary so that I can retire.”
Mario refuses to comply with Luigi’s demand. He wants to keep all $50,000 of his income, especially since he is saving money every year for his retirement. If he is forced to give Mario half of his annual income, he will have less money for his retirement.
Suppose Luigi has been making donations to members of Congress and, therefore, has lots of influence in that hallowed body. He tells Congress that Mario is being selfish and greedy. He induces Congress to enact a Social Security law that taxes Mario half of his income, which the the Social Security Administration then transfers to Luigi.
Wouldn’t most everyone see something fundamentally wrong with this arrangement? But is there really anything different in principle if Luigi is 65 years old and Mario is 30 years old? Is an immoral arrangement converted into a moral arrangement simply because the ages of the plunderer and the plundered change?
Another fascinating aspect of Social Security is the mindset of many younger people — the ones who are being plundered today. Many of them lament, “Golly, it’s just not fair. Social Security won’t be there when I get old.”
But that’s a fallacious sentiment. Of course, Social Security will be there. Why wouldn’t it be? All that is necessary is for younger people today to do to younger people 30-40 years from now the same thing that older people today are doing to them. In other words, when younger people today reach 65, all they have to do is use the federal government to plunder and loot the income of their children, grandchildren, and their peers. The possible problem is that younger people might not have large incomes to seize, but let’s imagine that it’s necessary to seize 60-70 percent of their incomes to fund their retirement of today’s young people. Who cares? What matters is that today’s young people will have nice retirements. Anyway, their children and grandchildren will be able to do the same thing to their children and grandchildren 30-40 years hence.
It’s worth noting that our American ancestors lived without Social Security for more than 125 years. That’s because they rejected socialism as an evil, malignant, and destructive system. They chose a system in which people were free to accumulate unlimited amounts of wealth (i.e., no income taxation or IRS) and were free to decide for themselves what to do with their own money. Interestingly enough, their system brought into existence not only the most economically prosperous nation in history but also the most charitable nation, one in which children and grandchildren honored mother, father, and grandparents on a purely voluntary basis, which, of course, is what genuine charity is all about.