by Dale Coberly
How to Sound Insane by
Talking Like a Bi Partisan Expert
on Social Security
I apologize for the next couple of paragraphs because they sound overworked and insane, but that’s what happens when you try to illustrate the way Washington talks about Social Security.
Try to imagine you have to buy a medicine that will save your life. You need 100 pills, and the doctor firmly said, “Finish the Medicine… if you stop too soon the infection will come back worse and you will die.”
So you go to the pharmacy and the pharmacist tells you the price of the medicine has gone up and your insurance will only pay for 98 pills. You say, “Okay, I’ll pay for the last two pills myself.”
But the pharmacist tells you, “I can’t let you do that. I can only give you the number of pills your insurance will pay for.”
This is what the “debate” about Social Security amounts to: You are going to need Social Security when you get old. The cost is going to go up by then about two percent. Washington has decided they can’t let you pay the extra cost. The only solution they are willing to consider is cutting the amount you will get… to less than it will take to keep you alive.
Those who would say, “Well, let them cut Social Security, and I will just pay for the difference out of my own pocket,” are missing the point that Social Security is insurance that will… if it isn’t cut… provide you with “enough” to live on even if “your own pocket” doesn’t have enough in it to “make up the difference.”
The “debate”… there is no debate, it’s all about telling lies to the people until they accept those cuts as inevitable… the debate is based on a number of lies, repeated by people who don’t know what they are talking about. The lies include:
Social Security is broke. Flat bust.
Social Security is creating huge deficits.
Social Security will be a huge burden on the young.
Social Security is the old ripping off the young.
Social Security is a bad investment.
Social Security reduces savings.
Social Security reduces people’s incentive to work.
Here is the truth:
Social Security can’t go broke. It is paid for by the workers who will get the benefits.
Social Security cannot create deficits. It does not borrow. It is paid for by the workers who will get the benefits.
Social Security will not burden the young: The young pay for the benefits that they will need when they become “the old.”
Social Security is not ripping off the young. The old people paid for their own benefits. The young pay for their own benefits, which they
will need. Some people cannot understand this because SS is “pay as you go”.
Social Security is not an investment. It is insurance paid for by the people who will need the benefits. It was designed to be “pay as you go” to avoid the dangers of “investments” where you can lose your money to inflation or to bad days on the market. In fact it does pay
an effective interest rate of about 2% above the rate of inflation. That means that you will get back about twice as much in real dollars as you put in. This is exactly how “investments” work, with “the young” paying “the interest” that “the old” eventually get on their “investments.” This is the way money works. The “bi partisan experts” know this, but by talking fast they are sure they can fool “the young” into thinking they are paying for someone else’s greedy granny instead of paying, while they have the money, for what they will need when they can no longer work. This is also the way the generations have cared for each other for the last million years or so, long before the invention of money.
Social Security IS savings. What it is not is money you give to someone else to invest in the hope of a profit… at the risk of losing it. The people who hope to make a profit from your money don’t like Social Security because it gives you a way to save without giving them your money to make more money with… or not. Meanwhile there is plenty of “savings” of that kind in the economy already. More than can be used by the “investors.” In any case, Social Security is cheap enough so that you have plenty of money left over to invest or lend in the hope of bigger profits if that’s what you want to do. In particular, if you cannot make money without “investing” what you would otherwise put into Social Security, you are exactly the kind of person who will need their Social Security benefits when the time comes.
Social Security does not reduce anyone’s incentive to work. You have to work to contribute your money to Social Security. This is where the money comes from that you get back when you need it most. Social Security only “reduces people’s incentive to work” when they are old and can’t work, or can’t find a job, or just decide that they “have enough” and want to spend their last few years enjoying life instead of working for the boss. Remember, they paid for their retirement themselves. The people who make money out of your work don’t like this. They want you to have to work every day until you die, or starve. That’s what they mean by incentive.
Those people… some very rich, some very clever “bi partisan experts” who work for the very rich… are going around the country telling lies and buying media and congressman trying to convince “the young” that they are being robbed by “the old.” The lies are very sophisticated and hard to refute in a few words. But if you try to think carefully about what you are hearing and do a little research you should be able to realize that the truth amounts to this:
You will be old some day and not be able to work. You may live longer than your grandparents did. It takes more money to live longer than it does to live shorter. In order for Social Security to pay for your longer life, you will need to pay a little more for your Social Security. The amount more is not large. Eventually it may amount to about an extra 15 dollars a week. By that time you should be making about an extra 150 ”real” dollars per week more than you do today, so you will have MORE money after paying the higher Social Security “tax” (it’s really “savings”: you get the money back, insured, with interest). And there is no need to pay this extra all at once. The higher cost can be phased in at a rate of less than a dollar per week per year… while incomes are going up more than ten dollars per week per year. This way the people who pay the higher “tax” will be the same people who will get the increased benefits (by living longer) and who will have the higher incomes to pay it with.
The bi-partisan expert liars like to confuse you with numbers they made up in a special way… called “net present value” which can be manipulated to look like you will get less back than you paid in. That is a lie. What they are saying is that you MIGHT (it depends) get back less than you would get back from a magic present value bank that ALWAYS pays a (made up) “return on investment” and has no risks and doesn’t have to pay any insurance benefits. Be careful what you listen to.
And find a way to let your Congressman know that you are willing to pay the few extra dollars it will take to make sure that Social Security will be there for you when you need it most.