A demand for honesty over Social Security's big lie

Friday, June 15, 2018
 | 
Chris Woodward (OneNewsNow.com)

Social Security check U.S. TreasuryIt's one of the oldest arguments against reforming Social Security program – don't touch my money! - but an expert on the issue says that's a deceptive belief.

U.S. births recently hit a historic 30-year low and some say those numbers suggest Social Security, already facing an uncertian future, is in bigger trouble. 

"No doubt people have paid very high taxes for their entire lives in order to be able to earn those benefits," says Romina Boccia of The Heritage Foundation, "but the problem is they have been lied to."

That's because the money people are paying in, she points out, isn't being saved and put aside on their behalf in some sort of trust fund.

"All the money they paid in taxes was immediately sent out the door to other beneficiaries," she warns, "and now that their benefits are coming due, those benefits are paid by the younger generation, by their children and grandchildren."

In fact, fewer than three workers are shouldering the burden of every retiree. So every family that has fewer than three children is relying on the children of another family to provide them with those retirement benefits.

"This is one of the big problems with Social Security," adds Andrew Biggs of the American Enterprise Institute. "It was set up to look like a program where you were paying in, you were building an account, and then you draw that money down in retirement. So people feel like a real ownership in the program."

If you ask Biggs, who worked for the Social Security Administration before joining AEI, Social Security has never really been a funded program.

"It's always been funded on kind of a pay-as-you-go basis," he explains, "where the taxes paid by yesterday's workers paid for benefits for yesterday's retirees."

That deal, he says, has to change for protect future generations.

 

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