Over the past few months with the debt ceiling debacle and the presidential race heating up, there has been quite a bit of press about Social Security, calling “Social Security an entitlement program” “free money for retirees “, and “the government’s own Ponzi scheme”.
I thought a glimpse into history to provide the facts and not “the spin” we’ve been getting from the media would be useful. I don’t know about you, but I have been angry hearing elected officials and wanna be elected officials calling social security an entitlement and Ponzi scheme. Every time I look at my pay stub and see the FICA tax withdrawn, I know for sure I am entitled to that money when I retire! I kind of have a sense of entitlement about that money too. I earned it, it is mine. I am angry that I do not have anything to say about it. The law mandates the money is taken from my earnings. The law also mandates what our government is supposed to do with that money, but that’s another story.
Social Security is a social insurance program that is primarily funded through dedicated payroll taxes called Federal Insurance Contributions Act tax (FICA). Currently it is the largest social insurance program in the U.S. Signed into law in 1935 by President Franklin Roosevelt as part of his New Deal Social Security was enacted in 1935 by President Franklin Roosevelt, a mandatory savings plan for an individual’s retirement. In short, it is an insurance. In the case of social security, upon retirement, the beneficiary would begin to draw a retirement check until death. In this case, the insurance company is the US Government.
Like an insurance program, someone has to pay the policy. Who pays for it? – every working person in the U.S. who earns a paycheck pays into the Social Security budget. Put another way, we are required to pay for our own social security policy so that our money will be there at retirement. Also, similar to insurance companies, the U.S. Government invests the Social Security deposits by buying U.S. Government bonds to make interest on the money. Unfortunately, our government is taking money out of our piggy bank to spend on anything it wants like the military and various social programs. This of course is what has been happening for many years and hence a shortfall in the Social Security budget. According to the Washing Post “Taking Apart the Federal Budget”, for 2011, the U.S. Government will take in $934 Million in payroll and other taxes, and pay out $730 Million for Social Security benefits. Just for comparison, $895 Million is budgeted for military spending, but we know that not all military costs are included that figure. A new report released by SIPRI, a Swedish-based think tank, reveals that U.S. military spending has almost doubled since 2001. The U.S. spent an astounding $698 billion on the military last year, an 81% increase over the last decade. This is at the same time we had significant revenue reductions. And a bank orchestrated financial melt down that has crippled the world economy and put millions of Americans out of work.
Entitlements on the other hand and by definition, are things we get for free. So if you think Social Security is an entitlement program – think again and then look at your pay stub. Everyone of us who is working is contributing money to Social Security and it is therefore NOT an entitlement. If the government is not going to have MY money for MY Social Security payout, then STOP TAKING MONEY OUT OF MY PAYCHECK, I will invest it myself. I am not advocating for the privatization of Social Security, I am just saying this is my money.
So for all the Presidential Candidates, elected officials of Congress and the Senate, the lamestream (oh I mean mainstream) media, political pundits, tea partiers and complete right wingers – STOP TELLING ME THAT SOCIAL SECURITY IS AN ENTITLEMENT – IT IS NOT. It is an investment on my retirement, that unfortunately, I must pay into and I expect to get a return on my investment, meaning a pay out.
The truth is the problem is not Social Security.
It is out of control government spending, along with a change in demographics in this country. With the baby boomers retiring, the largest generation born in our country (1946-1964) paying into social security, and fewer people in the job market (estimates are 16 million unemployed or underemployed Americans), social security is facing some problems. We’ve known this was coming every year, just by keeping track of the slowing birth rates.
To get people back in the job market, we have to add about 500,000 a month to come back to 2007 levels. Our government is not giving any assistance to small businesses, and they are the ones that create jobs in this country, not the mythical job creators.