Wednesday, January 23, 2013

The sad truth about Social Security

Please hide this particular article from any young hopenchangers who suffer from the delusion that Social Security will be around when they're ready to retire.

Social security is not earned retirement income, an entitlement nor a benefit.

Many people believe that Social Security is an “earned right.” That is, they think that because they have paid Social Security taxes, they are entitled to receive Social Security benefits. The government encourages that belief by referring to Social Security taxes as “contributions,” as in the Federal Insurance Contribution Act...

...However, in the 1960 case of Fleming v. Nestor, the U.S. Supreme Court ruled that workers have no legally binding contractual rights to their Social Security benefits, and that those benefits can be cut or even eliminated at any time.

Nestor sued, claiming that because he had paid Social Security taxes, he had a right to Social Security benefits.

The Supreme Court disagreed, saying “To engraft upon the Social Security system a concept of ‘accrued property rights’ would deprive it of the flexibility and boldness in adjustment to ever changing conditions which it demands.” The Court went on to say, “It is apparent that the non-contractual interest of an employee covered by the [Social Security] Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits is bottomed on his contractual premium payments.”

The Court’s decision was not surprising. In an earlier case, Helvering v. Davis (1937), the Court had ruled that Social Security was not a contributory insurance program, saying, “The proceeds of both the employee and employer taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way.”

In other words, Social Security is not an insurance program at all. It is simply a payroll tax on one side and a welfare program on the other. Your Social Security benefits are always subject to the whim of 535 politicians in Washington. Congress has cut Social Security benefits in the past and is likely to do so in the future...

Unfortunately for the drones (i.e., the Obama Cultists), the math always defeats the political rhetoric. Always. And the fuse on the fiscal time-bomb is fizzling away, without any of our leaders making the slightest effort to douse it.

Hat tip: R.F.

1 comment:

Anonymous said...

by referring to Social Security taxes as “contributions,” as in the Federal Insurance Contribution Act...

Which reminds me that just the other day I heard the Obamacare penalty/tax called by its original name:

shared responsibility payment.