Tuesday, February 15, 2011

Calling Social Security an entitlement is a lie

Most people understand "entitlement" to mean something for nothing--benefits you get that you didn't pay for. 

That's true of government benefits for poor people who aren't taxpayers. It's even more true of taxpayer-financed subsidies for giant agribusinesses. It is not true for Social Security.

Social Security, at its core, is, in effect, a mandatory government bond we pay into during our working lives. Then, after we retire, the government returns our own money to us until we die. If we last long enough we'll outlast the money we paid in. But even there, the government got to play the float with our money during all the years we paid into it--so if you add in the interest accumulated by our money while the government had the use of, it takes even longer for us to outlast our own contribution.

Now to the extent that you outlive getting back the money you paid in plus the interest that money could have made--that's an entitlement. And to the extent that SS benefits are extended to family members who didn't pay into it--that's also an entitlement.

But mostly it's not. Moreover, the baby boom bulge in the ageing of our demographics was anticipated decades ago and factored into increased SS payments from then forward.

So when the Republican shills state that Social Security is "running out of money" they're lying. The current dip below income and outgo was factored in long ago and is coming out of a whopping Social Security surplus produced by those increased payments. Even with no changes in the current system the Social Security fund won't be exhausted for many decades.

The problem, of course, is that government--Republican and Democrat--has been borrowing from the Social Security fund for decades. That's not the problem of the Social Security fund, however, nor of recipients, any more than the need of the government to honor its bonds is the problem of the bondholders.

Thus the real problem with Social Security is that the Republican Party's patrons don't need it, since they're billionaires, and they hate it, because they believe the only valid purposes for government are border defense and ensuring that billionaires get the corporate welfare they've come to expect. Anything else they regard as stealing from them--as do the oligarchs ruling Russia, Mexico, Haiti, and other countries with an income distribution like ours.

We could solve Social Security's longest term issues just by raising the income cap on it. Since most Republican Party members--as opposed to the leadership--are or will be Social Security recipients, it's interesting to see the GOP leadership's success in getting its rank and file to vote to cut their own throats. Makes me understand Jim Jones and his followers better...

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