Social Security is Not an Entitlement Program

This article should be of interest to anyone who is vested in the U.S. Social Security program. One of the governments most successful programs, Social Security has been incorrectly labeled recently by the media and our elected officials as an entitlement. This is clearly wrong and should infuriate anyone who has paid into the system. If you don't think this is an important issue...read on....

The Great Lie

Lately there isn't a month that goes by without hearing something bad about Social Security. We've all heard the bad news... "It's going bankrupt"...It's going to bankrupt the country"..."It should be privatized" ...and the worst of all...It's an entitlement program". Well, it’s high time to set the record straight on one count anyway! That being Social Security constantly labeled as an entitlement program by the government, Wall Street and most of the major media outlets. The entitlement label is just plain wrong and should absolutely infuriate anyone who has paid into the system for any length of time.

The Real Truth

Here is the short version of why the entitlement tag should not be applied to Social Security. This brilliantly conceived public program instituted by FDR has always been fully funded by employers and employees, without any need for government subsidy. The program is simple and has worked flawlessly for over 60 years. It’s operating funds are deducted from an employees salary and matched by the their employer. These funds are invested in a general fund that earns interest, ensuring the program remains solvent. In essence, Social Security can not be labeled an entitlement because the money being issued to recipients of the program is actually theirs to begin with!

A Perfect Real Life Example

There are many examples of why the entitlement tag should not be applied to Social Security. The following is one that we feel is perfect for explanation purposes. We recently spoke to an individual who worked for a single company for 10 years; and then operated his own business for over 20 years. The business had only one employee, that being him, the operator. In that 20 year time fame he owned his business, he paid both the employer, and employee portion of his Social Security income tax. The reason this example is perfect, is that in both situations, (e.g., 10 years, employee - 20 years, business owner), everyone is funding their SS account the same way as this man, (e.g., you pay one half, and your employer is paying the other half of your SS tax payments. Most people who do not own a business are unaware of this simple but hugely important fact. Every person paying into SS receives a mandatory, exact, matching payment from their employer. Incidentally as a side note, this is how most private company retirement benefit programs work. It's ironic that they would choose to follow a government program set up in the 30's. More on this below.

At age 63 the gentleman became totally disabled due to a non work related illness. Although he had a private disability plan, it only covered him for five years. His savings soon ran out, and at age 68, he decided to retire and take his full Social Security benefit. He now collects a Social Security check each month. Our point in telling this story is this. Since this gentleman is collecting money he paid into the SS system for over 30 years, 20 of which he paid both employer and employee portions, should this be labeled an entitlement? We emphatically say NO...and here is the reason why...

When contemplating retirement, the gentleman researched what he had paid into the Social Security program over the 20 years owning his business, plus 10 years of working for someone else before that. Remember that he had paid both the employee and employer portion of SS while he owned and operated his business. What he found out was astounding. Without throwing a ton of figures at you, the man told us that he calculated that, in over thirty years, with interest, his SS account had accumulated well over $700.000.00. His monthly benefit check from SS would amount to 2.300.00. In short, his SS account would support him for over 25 years! Since the 700K was money he invested in the program, how can the small monthly income he receives ever be considered an entitlement? Isn't it just his money being returned to him in the form of a monthly stipend?

The Great Lie - Number 2

If Social Security is classified as an entitlement because we have paid into it, and are owed, "entitled" to our own money, then are all future investment vehicles also entitlements? Are our 401K's, child's collage fund's, life & long term care insurance's to be also considered entitlements? This is the worst type of scare tactic, politician double talk to be ever perpetrated on the American public. The only entitlement label that can be attached to Social Security is our politicians idea that they are entitled to take (steal) "so called" repayable loans from the program which they have done for more than 30 years. This was not a minor monetary dip now and then, we're talking trillions of dollars here. These loans were supposedly used to pay down interest on government debt, pay for military actions, subsidize other government projects etc..., etc... The bottom line is that our elected officials had no right what so ever to take money (supposed loan or not) from Social Security with a "quid pro quo" guarantee that the money would be paid back down the road sometime. Since when has the government repaid anything -- ever?

Mortgaging Social Security - A Ponzi Scheme

To make matters even worse, some years back, our elected officials in Washington decided to institute an even more sinister policy regarding the SS fund. Basically they decided that all Social Security funds collected in that calendar year, over and above what had to actually be paid out as benefits, would be considered "a surplus". They decided this surplus should be siphoned off and placed into the governments general fund in the form of "repayable loans". Please note that the U.S. governments general fund is nothing more than a money way-station, or better yet, a bottomless pit from where nothing ever returns or is accounted for. Again, the surpluses amount to trillions of SS fund dollars illegally bilked from the program. This practice of loaning, and repaying at a later date, is nothing more than a glorified Ponzi scheme. Our government is in effect mortgaging the Social Security program to pay for things they want now, leaving us, or our kids to repay the trillions they have bilked from SS. Know wonder the government is so adamant about making SS out to be an entitlement program. What better way to slither out from under years of thievery, especially when you can't repay what you've stole.

These are just a couple of examples of how Social Security has been criminally mismanaged by our government. This mismanagement, not the advent of Baby Boomer retirement has jeopardized the most well run, and completely solvent, Government program in this nations history. Referring to Social Security as an entitlement program is not only incorrect but extremely offensive to all the hard working people who have paid into the program for many decades.

It's time for all U.S. citizens to speak up and correct the mismanagement, and mislabeling of Social Security. The issue should be of prime concern, no matter what your age, or financial situation. The federal government has begun a relentless campaign of scare tactics to cover it's tracks regarding the criminal theft of Social Security funds. These tactics include the threat of bankruptcy, privatization, benefit reductions and on and on. We urge you to Not Be Fooled by these lies! Do Not allow your government to completely wreck this program. And most of all, Do not ever, allow anyone, to label Social Security as an entitlement program!

No Privatization Please

Last but not least, a short note about privatization. This idea has been floated recently as a way of saving the Social Security program. The idea is to let individuals control how they invest their SS fund money. Please be aware that this is a really bad idea folks. Privatization is being lobbied to death by Wall Street fat cats who are salivating over the idea of gaining some measure of control over SS fund monies. I really don't blame them as what business in it's right mind wouldn't want a ready made multi trillion dollar market to fight over. However, we, as citizens should fight tooth and nail to not allow this to happen. Why? The simplest answer is to just look at what has happened to Wall Street and private retirement accounts the last 10 years or so. Through corporate greed and avarice, tens of thousands of personal retirement funds have been wiped out, never to be regained or returned. Wall Street has done a great job of stealing personal wealth, all while holding on to their own through unearned bonuses financed by who else...us the tax payers, in the form of government bailouts. Nice huh? We not only get screwed once, but twice, and both times with our own money! God forbid we let these thieves get access to any part of Social Security. Like we said, fight against this one tooth and nail!

Incidentally, you may, or may not have noticed that many, if not all private company retirement funds are structured exactly like SS. By that, we mean that a portion of your income is automatically deducted and placed in your retirement account. Additionally, like SS, most companies match the funds deducted up to a certain amount. We find this truly ironic, since many in government, and private industry, are chirping so loud about what a bad program SS is, and how desperately it needs to be overhauled. If it's really so bad, why are they duplicating it? Makes you think hard about what their real agenda is.

Social Security is Not an Entitlement Program
An Article By CoolFreebieLinks
Copyright July 2006
Modified January 2011
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Additional Notes:

The Social Security program has an independent budget that is separate from the rest of the federal government. Since 1982, Social Security has had surpluses ranging from $89 million to $190 billion per year. By law, these surpluses must be loaned to the federal government, which is obligated to pay the money back with interest. This is referred to as the "Social Security Trust Fund" and at the close of 2007 it had a balance of $2.2 trillion.
"By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government." Source: Bureau of the Public Debt, United States Department of the Treasury. Last updated August 4, 2006. http://www.treasurydirect.gov/news/pressroom/pressroom_bpd08052004.htm
"Additionally, the Government Trust Funds are required by law to invest accumulated surpluses in Treasury securities. The Treasury securities issued to the public and to the Government Trust Funds (intragovernmental holdings) then become part of the total debt." "The faith of the United States Government is pledged to pay, in legal tender, principal and interest on the obligations of the Government issued under this chapter." Source: United States Code Title 3, Chapter 31, Section 3123: "Payment of obligations and interest on the public debt." http://www4.law.cornell.edu/uscode/31/3123.html