Who is Lying about Social Security?

Governor Rick Perry has said that Social Security is a Ponzi scheme and a "monstrous lie." Perhaps this is just political BS and should be ignored by anyone serious about religion and moral values. For one thing, it is unclear to me precisely what he thinks the "lie" is; what is untrue about the idea that future generations will have the same benefits that the law calls for and are provided to senior citizens today?

It is true that the Baby Boom generation, the front edge of which is turning 65 this year, will create a problem because there will be for a period of time a smaller population paying taxes and a larger population getting benefits. That problem has been examined in tens of thousands of pages of careful studies and it can be fixed with a small increase in taxes, an average of less than $200 per year per taxpayer. It will leave the United States still with the lowest taxes of any industrialized country.

The interesting thing is that the right-wing politicians who have made speeches similar to Governor Perry's all say that they do not intend to change any of the benefits for the people (like me) who will become eligible for Social Security in the next decade (or longer, depending on the specific speech). What that means is that they are not proposing to fix the "bubble" described above. They are talking about changes that have to do with the situation decades down the line when the larger Millennial generation will be the taxpayers and the smaller Gen X will be those going onto Social Security. Why use the contemporary problem to argue for changes that will not come into effect until the problem is passed?

One possibility is that this entire effort is fundamentally dishonest. The real purpose of rhetoric against Social Security is to attack a plan that some politicians do not like because of the basic concept itself not because there are any real economic problems associated with it. Another clue that this might be going on is the total lack of any description of an alternative. What does Governor Perry propose to replace Social Security with? A previous Texas governor who became president proposed to modify Social Security by allowing individuals to put money into a type of Individual Retirement Account (IRA) instead of paying taxes into the Social Security program. This was dropped after analysts across the political spectrum agreed that it did not solve any real problems; it did not improve anything. It only gave a relatively small percentage of the population with very high incomes a more lucrative retirement.

Frankly, I agree that individuals with sufficiently high incomes ought to be allowed to put money into an IRA instead of the Social Security fund. And Social Security benefits ought to be paid only to people who have incomes below a reasonable ceiling. But, if you look at the numbers you will see that this is simply a trade-out. It does not change any of the major facts in the situation.

What is the moral meaning of this issue?Is there anything about this item that is not simply politics? I believe so. It seems to me that when politicians like Governor Perry say that Social Security is a Ponzi scheme and a lie, they are lying. They are engaged in a propaganda technique that dates back nearly a century called "the big lie." (Look it up in your high school civics textbook.) It is simply this, if you assert something loud enough, often enough and with sufficient conviction, then it will appear to be true even if it is totally lacking in factuality.

In the early 1970s there was an effort to get senior citizens signed up for Social Security and Medicare. I worked in that effort and talked to thousands of seniors, going door to door in inner city neighborhoods. I have seen the kind of poverty and suffering that existed before the Social Security and Medicare programs became as entrenched in American society as they are today. I do not want to go back to that kind of America. I do not know why anyone would want to go back to that kind of America.

I share Governor Perry's biblical worldview which makes him even more morally culpable in my opinion. There is an objective reality which is outside the control of politicians or wishful thinkers or opinionated people of any kind (including myself). If we have no social insurance plan in America, people will suffer. Telling young people that there will be nothing for them, therefore they should vote to close down the program is truly a monstrous lie. It is manipulating them into creating the lack of benefits in the future. Can a politician convince you to shoot yourself in the foot? Is it moral for him to try just so he can get himself elected?

Comments

[Rich DuBose]

I agree with you on every point. Anytime someone comes out and uses a broad brush to make spectacular claims, as Perry has, red flags start flapping in the breeze.

[chris]

Brethren, before we verbally lynch the governor, can we baseline the facts since lying is alleged.
I recommend this fact package on entitlements.

http://www.urban.org/UploadedPDF/social-security-medicare-benefits-over-lifetime.pdf

We are faced with an enormous challenge.
An increased dependence on SS while young, struggling families are bearing an increased burden. How do we manage generational wealth flow? What moral principle will we apply?

[Monte]

Chris, I am familiar with the data in the Urban Institute paper that shows that the average American will be paid out more than he or she pays into the Social Security/Medicare programs. I think there are a number of ways to address that differential, but is it ever moral to solve this problem by empoverishing senior citizens?

One solution to this problem would be to remove Medicare from the program and fund health care the way every other industrialized nation on the globe has funded it for decades. Why we insist on health insurance is beyond reason, so far as I can see. We could also shrink the gap by means-testing Social Security. And the remaining differential we could probably finance largely by actually investing the Social Security Trust Fund, although that may create problems of further government involvement in the stock market, etc. I doubt that we politicians with enough courage to pull off any of these solutions.

[Edwin B]

Maybe we should go beyond the simplistic "it's a ponzi scheme" and the simplistic "it's a lie", and actually try to understand his point? I remember back in 2000 Al Gore talked about the "lock box." He was trying to warn us that we are squandering the SS money and soon will run out. No one listened then. Later, when GW Bush tried to make necessary changes, he got 'crucified' by both sides. Now we are trying to infer that somehow Perry is and immoral liar because he is trying to sound the alarm again. Can't we all agree that social security is in trouble and needs fixing?

What is the basis for trying to verbally attack and even impugn the character of Gov Perry? How is that different from physical violence? The Bible tells us that with our tongues we can "kill" people.

I think we are all on the same side. We think Social Security needs to be fixed. Here's a link to what Gov Perry says he wants to do about social security.

http://www.usatoday.com/news/opinion/story/2011-09-11/Rick-Perry-Social-Security/50362610/1

[chris]

Monte, I like the idea of sharing solutions. The collective model for health security is actually being reconsidered in several european models. The rising cost factor without market pressure that comes from consumer choices is being considered.

Let me also join Edwin in sharing an opinion piece of the topic.
http://online.wsj.com/article/SB10001424053111903285704576558552710418440.html?mod=WSJ_Opinion_LEADTop

[Monte]

Chris, Edwin (and anyone who can help us) ... what I have not seen anywhere is a plan that shows how funding for Social Security will move from an entitlement law to a funded social insurance plan. How much money would be invested and under what terms? (Specifically at what level of risk?) How long would it take to build up the equity in the fund until entitlement spending is no longer necessary, except in periods of fiscal emergency? In other words, we need the data to determine if this concept is realistic or if the cost of it out weighs the downside of entitlement spending. I read a good article this weekend describing three counties in Texas (which Gov. Perry has held up as examples of what he is advocating) that have replaced Social Security for their employees and retired employees. (Which is a small segment of the total population.) The manager readily admits that it is dependent on the real Social Security program as a safety net and that it has one major flaw he would remove if the plan were being launched today. Clearly this does not look like a replicable experiment at a national level.

[chris]

Monte, Let's continue the conversation. Getting the governor to put his plan on the table would be a first step.

I also saw this piece from the Texas Tribune

http://www.texastribune.org/texas-politics/2012-elections/how-privatized-social-security-works-galveston/?utm_source=texastribune.org&utm_medium=rss&utm_campaign=Tribune%20Feed:%20Stories

My hope is that we avoid the mis step of 2006 and actually have a national conversation about entitlements. Ideas cannot be DOA before the conversation. For sure economic security is driving the debate, but we as a nation needs to get some leadership to move us beyond the emotional shrill, and deeply consider how we refresh and sustain our social contracts

[Monte]

Chris, the article you provided a link to above is the one that I saw reprinted in the NY Times. It is a very interesting read, but the people in charge of this alernative plan evidently do not think it is a solution ready for national adoption. Please check my math: I do not see enough money in cuts (even if we closed down the wars and the Pentagon altogether) to adequately fund the Social Security Trust Fund. If we did make the journey to change Social Security from an entitlement program to an adequately funded insurance plan, would that not be so far in the future that we cannot have any idea of what the issues would be on the other end? Edwin, is my math wrong?

[chris]

and another solution idea
http://www.politico.com/news/stories/0911/63938.html

[Renee Hernandez]

It is interesting to read the above comments all obviously from men well funded good jobs no worries where next meal coming from..now how about reality check..I receive SSDI(thank God for that) prior to getting it were my fellow believers helping me out? NO!! Were they helping when I continued struggling?NO..If I did not have SSDI I'd be living under a bridge somewhere or worse..