Abolish Social Security

DELIVERED ON 10/27/20

I am here today to address the elephant in the room; point out that the Emperor has no clothes, and touch the third rail of American politics and the most sacred of sacred cows in the Progressive State of America, the failed policy that both parties race each other to embrace and protect and about which the Red and the Blue Teams are terrified to tell you the truth: Social Security.

Like most failed government programs, the very term itself is a lie. It is neither “social,” that is, pertaining to society, the voluntary sphere of human activities, nor is it “secure”. Of course, we should not call it “social,” but socialism security or government security, to describe its actual nature as a program you are forced to enter at government gunpoint and cannot leave lest you face the same government guns.

But the word “secure” is perhaps the bigger lie. Is there anything really secure in human affairs? Surely not socialism security. It is well established that you have no constitutional right to your alleged benefits. In spite of all the Orwellian-speak about entitlements and non-discretionary parts of the budget, guess what folks, Socialism Security is just a statute, 2 a law that Congress can repeal tomorrow if they want to.

Because socialism security can be abolished any time and unconditionally–every two years, on schedule, politicians scare seniors by alleging that the other party will take away “your” socialism security. Usually, the alleged villain is the Republicans, however, Republicans, far from fulfilling their promise to shrink government, are usually the first to come to the rescue of socialism security as Ronald Reagan did in 1983.

But there is yet another lie. I have already proven that it’s not “your” social security. It’s the government’s slush fund and they can spend it as they wish.

Between Social Security and Medicare, another failed progressive program whose main accomplishment is the overmedication of our grandparents, the American worker now pays an astonishing 14.2 percent of his wages to the so-called “payroll tax,” another Orwellian term designed to hide what the government is doing: stealing your money and making you poorer and more dependent on slimy politicians. It’s not a tax on your company’s payroll; it’s a tax on your wages!

It’s worth noting that the typical pay stub of Americans is a fraud as it fails to contain a full statement of your actual wages and the gigantic amounts the government steals from your wages that are not even reported on your pay stub! That is why Jim Ostrowski and I are starting a new website called Audit the Paycheck where you will be able to punch in your information confidentially or anonymously and get the truth—you are being ripped off even more than you already thought and the politicians don’t want you to know the truth.

So the price you pay for this wonderful benefit that is not guaranteed and can be taken away from you any time is 14.2 percent of your income before the 3 federal income tax, the state income tax, the property tax, the sales tax, the corporate tax, all the other miscellaneous taxes and of course, the astronomical and incalculable tax called regulations. Don’t ever forget—a regulation is a tax.

So every week, the quality of your life and your family’s life and the security of your future and your ability to invest in education or your business or to start a new business is severely damaged, all to pay for the campaign promises of a dead politician known as FDR.

Your money is not invested for your future but is immediately spent by a bankrupt government running a $27 trillion debt. Even that amount understates the insolvency of social security. Let me quote at length from economist Lawrence Kotlikoff:

These entitlement programs “were never financed on a pay-as-you-go basis, in which each generation pays for what it gets. Instead, they were financed on a take-as-you-go basis, with retirees collectively expropriating their children, while promising them their turn at doing the same. . . Our hydra-headed Ponzi schemes have failed spectacularly. . . .[the] Social Security Administration. . . . reports a whopping $43 trillion [fiscal] gap . . . A sure sign of a failed Ponzi scheme is when later workers get a far worse deal than early workers. Today’s and tomorrow’s workers will pay at least a third more in Social Security taxes per dollar of benefits than Baby Boomers paid. Their projected negative return on those taxes is far below prevailing returns on government bonds.

The combined unfunded liabilities of Medicare and Medicaid are bigger than Social Security’s. Indeed, for the entire federal fiscal system, the present-value funding gap is not $43 4 trillion, but $165 trillion — seven times this year’s GDP!

Ponzi schemes come at a wage-growth cost. The elderly, with fewer years to live, spend at a higher clip than the young. Taking from young savers and giving to old spenders has dropped the US’s national saving rate from 13% in the 1950s and 1960s to 3% in the last two decades, producing a commensurate drop in our domestic investment rate. This in turn, has meant lower labor productivity and wage growth… Given the US’s decades’ long miserable rate of wage growth and pending massive tax hikes, our children will be lucky to reproduce our living standard. . . . It’s time to get real. Uncle Sam’s ongoing, let alone expanded, Ponzi schemes constitute generational theft. The schemes are economically ruinous, morally repulsive, and the death knell of the American dream.” [Forbes, 2/26/20]

What a brilliant analysis by Professor Kotlikoff. The government steals from you to pay current recipients, ruining your life, causing the economy to stagnate, hitting you again by lowering your wages. It is a Ponzi scheme doomed to collapse and it is intergenerational theft.

I propose today to end the Ponzi scheme and the exploitation of young workers who have no guarantee they will ever receive full benefits or any benefits.

Young workers just entering the Ponzi scheme should be allowed to opt out and receive an immediate, permanent, raise of 14.2% for the next fifty years!

Freedom of choice should not be limited to younger workers. We need to also construct a path for longtime workers to opt out as well in exchange for a cash buyout they agreed to. Finally, even current recipients should be allowed to opt out in exchange for 5 a lump sum settlement they accept as reasonable. This would have the benefit of increasing their net worth and allowing them to pass along their assets to their heirs. This would begin to chip away at the problem of intergenerational poverty caused in part by taxing families to death and not allowing social security recipients to pass along their account balance to their heirs.

Now, of course the obvious objection to all this is how to pay for it all. Let me first point out that no one would even ask this question if it wasn’t a Ponzi scheme where the government pays off older investors by ripping off newer ones. If you did this in the private sector, you would go to jail. But, we can end the Ponzi scheme very easily by massive spending cuts in other programs, starting with ending the global military empire and abolishing or severely reducing several expensive federal departments such as Energy, HUD, Education, Agriculture, Commerce and by starting to sell off some of the vast land holdings and real estate of the federal government that includes numerous valuable assets including mining rights.

So, we can liberate the worker, end the Ponzi scheme, boost the economy and protect seniors. We can stop paying for the reckless campaign promises of dead politicians. The country is failing because of the failed campaign promises of dead politicians such as FDR and LBJ, but liberty works, let’s try it before it’s too late.

Let’s liberate the worker now!