Report: A COVID-19 Economy Could Bankrupt Social Security Sooner – Revealing Its Generational Enslavement

P. Gardner Goldsmith | April 28, 2020
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Among his many important and timeless observations, one of 19th Century economist and political philosopher Frederic Bastiat’s best is, “The state is that great fiction by which everyone tries to live at the expense of everyone else.”

And nothing typifies that dictum about perpetual predation better than the so-called “Social Security” system -- which isn’t really “social,” since it’s a creation of the state rather than society (so, by definition, it’s anti-society, i.e. antisocial), and it certainly has never, ever been secure.

And, if any Americans were still willing to ride the economic unicorn most politicians tell them exists – that being the fantasy that Social Security is an “insurance program composed of YOUR investments” – they might not be once they hear the latest.

That comes to us via Reason’s Eric Boehm, who reveals that the Social Security Administration’s latest report incorporates early data from the COVID19 economic crash, and that data indicates that pandemic and government closures of businesses will see the “Trust Fund” (smirk) go insolvent sooner than expected.

So let’s just take a quick tour of the Oz-like soundstage that curtain-pullback sentence exposes.

How could a “retirement insurance” program become “insolvent”? After all, it’s just that trustworthy government doing something what’s gotta be “constertutionalistic” there and forcibly takin’ your money for “safe keepin’” ‘cause yer too stoopid to handle it yerself. It’s “insurance”! In fact, the REAL name of the “Social Security” fund within the 1935 “Social Security Act” is OASDI, standing for “Old Age Survivor, and Disability Insurance.”

There must be something funny going on. Oz is real, right?

Well, as Boehm observes:

Even without the pandemic factoring into the calculations, Social Security is heading for insolvency by 2035, the report says.

And Boehm notes that anyone over 50 will likely experience cuts in their “benefits” as even more cash is now thrown into the Social Security sewer.

But that’s the rosy projection. The COVID-19 economy means less money than expected will be shoveled into the federal coffers, and that means an earlier fall for the so-called “insurance” program.

If the coronavirus results in economic losses of 15 percent for the current year, the program would likely face insolvency by 2034, says Stephen Goss, chief actuary for the Social Security Administration. Another year of losses would move that date even closer.

And if you’re getting the hint that such news does, indeed, pull a Toto on the Wizard’s curtain in Oz, you’re right.

This tells us that the so-called “Trust Fund” doesn’t have enough in it to handle what people have had taken and are expecting to get back. In fact, it never was a “trust fund,” and it never was an insurance program.

Of course, that’s easy enough to figure out, since theft is not “insurance.”

But these new numbers tell us the whole truth. Social Security is generational slavery, whereby the young are enslaved to pay for the “insurance” of the old. And that’s the way it was designed.

Passed in 1935 at the behest of the collectivist President Franklin Delano Roosevelt, and based on the collectivist money-grab scheme of 19th Century German Chancellor Otto von Bismarck, Social Security, like Medicaid, is a giant generational pyramid scheme, utilizing the productive capacity of new human cattle at the bottom to feed the cattle ready to “retire.”

As Pepperdine University economics professor Gary Galles wrote for the Mises Institute in 2013:

If Social Security and Medicare both involved people voluntarily financing their own benefits, an argument could be made for seniors’ “earned benefits” view. But they have not. They have redistributed tens of trillions of dollars of wealth to themselves from those younger.

So, if you run into someone who tells you that Social Security isn’t a Ponzi scheme, you can let him or her know such a belief is well off.

As Galles observes:

Social Security and Medicare have transferred those trillions because they have been partial Ponzi schemes.

And he adds something I often stress to my students:

After Social Security’s creation, those in or near retirement got benefits far exceeding their costs (Ida Mae Fuller, the first Social Security recipient, got 462 times what she and her employer together paid in “contributions”). Those benefits in excess of their taxes paid inherently forced future Americans to pick up the tab for the difference. And the program’s almost unthinkable unfunded liabilities are no less a burden on later generations because earlier generations financed some of their own benefits, or because the government has consistently lied that they have paid their own way.

And as the current herd of people the government treats as cattle stay locked in their COVID Corrals, unable to work without fines and retribution from the state, the redistribution of wealth formula gets even uglier. Notes Boehm:

And if the coronavirus response triggers a long-term recession, the urgency of Social Security's status becomes more apparent. According to a projection from the Bipartisan Policy Institute, another recession of the length and depth of the so-called Great Recession that followed the 2008 market crash would cause Social Security to face insolvency before the end of the current decade.

And this is just the practical side of this evil system of generational enslavement. It IS evil. It IS enslavement, and it IS unconstitutional, something any cursory glance at the so-called rules of the U.S. reveals.

But don’t mention this in the Oz of the USA. And don’t dare mention that people who can keep their own money do far better than the “return” of “Social Security” -- be they investing in stocks, or precious metals, or land, or real estate, or even in simple things like farm machinery or tools they might rent as income streams – without TAKING it from others.

Time, logos, and ethics tell us that Bastiat was right on most things. And he certainly was right about the nature of the state. It is perpetual predation, a circle of conceit and constant thievery hiding behind a curtain of “security” that’s no better than the mob.

Don't ever think it makes you more financially "secure."

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