Mar 24, 2013

Fear Mongering?

     Would the Wall Street Journal engage in fear mongering on Social Security? Here's what they wrote today:
Q: Will I receive Social Security benefits?
A: That's a big "It depends." If you're over 65, no sweat. If you're 45-65, you might see some changes from the relatively generous benefits enjoyed by your parents. If you're under 45, you have plenty to worry about.
     Actually, I don't think this is fear mongering but only because I think they believe it. The problem is that they just don't get it. Social Security isn't protected by the trust fund. In and of themselves, the Social Security trust funds are more trustworthy than any of the country's financial institutions but they're still promises written on paper. Social Security has something far stronger going for it than the trust funds. Widespread, unshakeable public support. The writers at the WSJ are in the small minority that doesn't support Social Security. They think that eventually the rest of the country will see things their way. That hasn't happened in more than 75 years. I see no reason to think that will ever happen. 
     As I've written before, the concept of Social Security started with Bismarck in Germany well over a century ago. Social Security has persisted in Germany despite its devastating loss in World War I, hyperinflation during the Weimar Republic, Germany's devastating loss in World War II, the division of the country after the Second World War, the Cold War and the eventual reunification of the country after the fall of the Berlin Wall. If all that couldn't destroy Social Security in Germany what sort of catastrophe would take to destroy Social Security in this country? Nuclear holocaust?


Anonymous said...

Social Security is as strong as a rock, a commitment to the American people. Tell that to us that lost a year of benefits thanks to the Government moving the retirement age from 65 to 66. This was sometime after I began pay into the system, understanding I could receive full retirement at age 65. Thank you Government for living up to your share of the agreement. Liar, liar, pants on fire. Why would I ever doubt the Government??

Anonymous said...

Oh, for God's sake. Social Security has been amended numerous times since its inception. If we kept it exactly as it was in 1937, we wouldn't even have disability benefits now. Raising the FRA one year was a minor adjustment, as was the FICA raise (1983 Amendments) along with most changes to the Act.

Anonymous said...

I'm under 40 and fully expect the Social Security I see today to be overhauled for the people in my age group. In fact, if it isn't, I'll be very disappointed. I hope Social Security is around when I'm of age (whatever that might be) but I'm not counting in it. Change always effects someone or some group, it's inevitable.

Anonymous said...

Agreed, I'm 34 and I am planning on Social Security to be a very small portion of my expected retirement income (if it exists at all).

As noted above, expecting it to continue, unchanged is like staying on the Titanic, hoping it won't sink.

Mike B. said...

The other thing Social Security has is a dedicated tax. This by itself is enough to pay future retirees more in real dollars than current retirees receive, with no changes whatsoever. The only thing that projected benefits now don't do is keep up with the projected rising standard of living (which is more than inflation).

So even current law will give young people higher benefits than current retirees. The only thing they stand to lose is some of the real rise in the standard of living. They can avoid even that if they pressure the politicians to fund currently scheduled benefits.

Anonymous said...

There is the thing, and then there is the value of the thing (or lack thereof). Social Security may be a rock, but it is hardly a slab of granite; more like a limestone sculpture, subject to the persistent defacement of political and economic vandalism and the slow, but unrelenting weathering away caused by a climate change in the nation's demographics.

Anonymous said...

Just watched Ken Burns' "The Dust Bowl" about the multi-year drought in the MidWest in the 1930s. It put a whole new perspective on why FDR supported Social Security (also why we have farm supports to this day). Always been a firm believer in Social Security -- the film just opened my eyes a bit more about the abject poverty in our nation in the 1930s, for people who were working hard but unable to earn a living. And, there were naysayers back then grumbling about socialism. Thank God they didn't win! We, as a country, don't want to go there again.

Don Levit said...

Mike B:
By definition, taxes are for the general welfare. The only thing they are dedicated to is for the betterment of our country. Therefore, taxes are spent on whatever Congress deems to be important,. FICA taxes are spent on Social Security beneficiaries for they are part of the general welfare. I dare say, though, a small part. Those dedicated taxes go into the treasury's general fund, like all other taxes. They then become indistinguishabe from all other monies.
In order to pass constitutional muster, Social Security was set up in 2 separate titles - one a title to tax and the second, a title to spend. At no point do these 2 titles intersect.
Don Levit