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Why Trust in Social Security?


Isn’t a central argument among those who argue for the continuation of America’s premier socialist program, Social Security, that Americans cannot be trusted to voluntarily take care of the needs of their elderly parents?

Let’s set aside all the nonsense about “I put it in and therefore I have a right to get it out.” The irrefutable truth is that all the money that people “put in” is spent, poof, finis. There is no “I put-it-in” money that is earning interest in some investment fund.

Most of the Social Security tax revenue that comes from Social Security taxpayers is transferred to Social Security recipients. It is gone. That is what makes Social Security a transfer program rather than a retirement program. Money is coercively taken from the young and productive and distributed to Social Security recipients.

What about the excess — that is, the amount by which the amount collected exceeds the amount paid? Don’t look there for hope or for some of your “I put it in” money. The government spends that excess as part of its general welfare-state expenditures. In return, it inserts government “IOUs” into the so-called Social Security fund. What that means is that federal officials are promising to pay the Social Security money back, with interest, that they are spending. And where will they get the money to pay back those IOUs? You’ve got it — through more taxes imposed on the citizenry as those IOUs come due.

The entire Social Security scheme is a lie and a fraud of monumental proportions — and has been since the very beginning. If someone in the private sector tried something like this, he’d be serving a long sentence in a federal penitentiary.

Let’s divide Social Security recipients into two categories — those who truly depend on the government’s largess and those who don’t because they are already sufficiently wealthy.

Those who aren’t financially dependent on Social Security could be cut off immediately. Why should young people who are struggling to start families be forced to subsidize the lifestyles of the wealthy? If people wish to make a donation to someone who is financially well off, they can do that privately and voluntarily.

What about those who truly are dependent on the Social Security money? Why couldn’t they rely on their children, who now would no longer have to pay Social Security taxes? (Keep in mind, again, that the source of Social Security money is the taxes that are imposed on recipients’ children and grandchildren.)

The implicit reason, according to the bureaucrats, is that Americans cannot be trusted to voluntarily help their parents. That is, if Social Security taxes were abolished, children would sooner let their parents die in the streets than voluntarily help them out. Or to put it another way, only bureaucrats, not regular people, can be trusted to help people in need, albeit with money extracted from regular people through the force of the IRS.

What about old people who don’t have children or who have children who don’t want to help or who lack the means to help enough? Well, what about church groups and community groups and nonprofit charitable foundations? Isn’t that what they’re all about? Isn’t the bureaucratic argument the same: that these people cannot be trusted to help others in need?

Ultimately, the commandment “Honor thy father and thy mother” is addressed to the hearts and minds of individuals. To mean anything in a moral sense, the choice of whether to comply with the commandment must come from the heart and mind of the person. Isn’t that what free will is all about? How can morality and compassion and obedience to God be reconciled with majority rule, the IRS, and bureaucratic decision making? Maybe that’s why our American ancestors declined to enact such socialist programs as Social Security (which originated among German socialists during the regime of Germany’s Iron Chancellor, Otto von Bismarck) for more than 125 years after our nation was founded.

Lack of trust in the American people among the bureaucrats is not surprising, especially seeing that they have such a large stake in Social Security (i.e., government salaries and pensions needed to administer the program). What’s sad is that ordinary Americans have bought into this mindset by losing trust in themselves to do the right thing, voluntarily. That’s undoubtedly why they spend their time supporting plans to save and reform the crown jewel of America’s socialistic welfare-state system rather than telling their public officials to simply toss Social Security — and the taxes that fund it — into the dustbin of history.

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    Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.