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By Paul Geary
February 10, 2005
The New Editor
One wonders if the nation will tire of the assertions that George Bush is lying about Social
Security, as it did about those kind of assertions regarding weapons of mass destruction and
National Guard duty. Liberals and Democrats don’t seem to understand that the reason the
"liar" reputation stuck to Richard Nixon was because he was caught in an actual lie.
Only now, unlike 1973, the Left seems to believe that speculation equals lie. Educated guess
equals lie. Projecting into the future equals lie. Despite George Bush choosing to feature
proposals to change the former "third rail" of politics -- politically he doesn’t have to given
the major distraction that the war on terrorism provides -- cries of "Liar!" are more
numerous than policy alternatives. To wit:
Terry McAuliffe, Chairman of the Democratic Party: "George W. Bush had an opportunity to
speak honestly with the American people tonight about the state of Social Security and his
own plans to privatize the program. But he opted instead to carefully and deliberately
mislead." (You can read the full-on hysteria here.)
Jonathan Cohn, The New Republic: "For once, he (George Bush) actually seemed to be
moving--ever so slightly--in the direction of intellectual honesty. The big lie behind
privatization (well, one of the big lies) is that transforming Social Security into a system of
private savings accounts would somehow eliminate the program's long-term financing
shortfall."
Paul Krugman, New York Times: "For years, privatizers - including Mr. Bush - have claimed
that people would do better with private accounts than with traditional Social Security even if
they played it safe and invested in U.S. government bonds (which yield 3 percent after
inflation). But the official at the briefing made it clear that his boss was fibbing: if you
invested your private account in government bonds, you would face benefit cuts equal in
value to your investment, so you would be no better off than under the current system."
Actually, the president has been more honest about Social Security than any politician since
Concord Coalition founder and former Massachusetts senator Paul Tsongas got his clocked
cleaned by Bill Clinton in the 1992 Democratic primaries.
Why is it a distortion to say that the system may go bankrupt in 2042, as Cohn says? The
president was obviously going for rhetorical flourish, but bankruptcy is merely protection
from creditors. Isn’t a lowering of promised benefits tantamount to protection from creditors
(the future beneficiaries)?
Speculation about what might happen forty years from now is not dishonesty, even if it turns
out to be wrong. Consider that the cries are coming from the side of the aisle with a history
of varying degrees of sympathy for quasi-utopian philosophies such as socialism and
pacifism. It was Ted Kennedy who quoted his brother Bobby at RFK's funeral, "Some men
see things as they are and say why. I dream things that never were and say why not?" The
senator has outgrown his brother's idealism, just in time to fight for his party's current
fascination with obsolescence.
Here’s the truth, folks. If George Bush is in any way dishonest about Social Security, then
it's fair to say that nearly everyone in America has been dishonest to some degree about the
program. Consider the rhetoric we’ve been spoon-fed for a few dozen years: the "solemn
compact between generations." The idea that social security was "earned." The "lock box" on
the "trust fund." What unmitigated baloney we’ve served to each other.
Want more hard-to-swallow truths -- beyond the simplistic and possibly wrong assertion that
we’ve got to raise payroll taxes to "save" the system? OK, here we go.
--Polls show that some people, and a growing number of young people (if the anecdotal
evidence of students in my classes over the last five years is an indication) believe the system
should go away, since they don’t anticipate seeing benefits when they retire.
--There is no "trust fund." It doesn’t exist. The system is pay-as-you-go. Any other
description of social security is rhetoric.
--The Social Security tax is likely the most regressive tax in the United States. It’s more
regressive than property or sales taxes. People who make less than $90,000 pay a higher
percentage of their income to fund the system than those who make more, because you stop
paying the tax at dollar number 90,001. If you make $90,000 per year and have three
children in college, you’ll pay 12.4%, or about $11,200 in Social Security tax. Bill Gates will
pay $11,200 in Social Security tax. The members of congress with six-figure salaries and
blind trusts who yelled at the president during his state of the union speech will pay $11,200.
The hypothetical working single mother that Democrats always tell us about, struggling to
get by on minimum wage, will pay 12.4% of her income to Social Security (in reality, the
employer share of her salary is pulled out of her income), regardless of her difficult
circumstance.
--Operationally, Social Security is merely a form of welfare. Most seniors today get far more
from the system than they ever put in, even if you factor in interest. That’s why we call it a
"benefit" rather than a "dividend" or "earnings." In other words, seniors are getting money
from the government that they did not earn, just like a 20-year old single mother collecting
government assistance (welfare) might.
--Certain groups of people get the shaft, and others get an advantage under this system.
African-American men live to an average age of 65, meaning that a significant number of
them will not live to collect. White women, on the other hand, benefit handsomely. They live
longer than most other demographic groups, and historically have contributed less to the
system. I’ll use my own grandmother as an example. My grandfather retired in 1975 (and
died in 1994), and she has benefited from Social Security since then -- for 30 years.
(Message to Harry Reid: She lives in Las Vegas. Social Security money is already pouring
into casinos.) Of course, same-sex couples and unmarried couples don’t get this benefit --
and yet, gay people, unmarried people, and African-Americans all vote majority Democrat.
--Senior citizens are the wealthiest age demographic in the nation. We here much about the
poverty-stricken and the dependent in this age group, however, many seniors own their
homes outright, and have much higher net worth than younger demographic groups. People
over 55 have an average net worth of well more than half a million dollars, about six times
that of people under 35. The stats can be found here (scroll to page 457). A non-means
tested Social Security system is nothing short of a transferance of wealth from struggling
young people to seniors who are for the most part well-off.
Can we then make a modest request? Before claiming the president is lying, please at least
furnish us with an actual, tangible lie; that is, something you can prove is demonstrably, as
opposed to speculatively, false. Disagreement with administration policy, projections, and
possible outcomes is acceptable. Calling the futurist a liar is futility, and contributes nothing
to the debate.
Paul Geary is a contributing editor for The New Editor.
Paul Geary
David Rogers