At age 15, I’ve already found my calling: information rights activist. No, not your right to information but the natural rights of information, particularly against cruel and unusual punishment. I say this because a lot of Social Security advocates seem to be manipulating statistics and torturing facts to suit their preferences.
I am part of the generation most affected by changes to Social Security, so I decided to investigate. I began my research — where else? — at the Social Security Administration. I was particularly interested in the legendary “trust fund” that seems to be the crux of the controversy. In a section on “Internet Myths,” the SSA writes: “From its inception, the Trust Fund has always worked the same way. The Social Security Trust Fund has never been ‘put into the general fund of the government.'” In two sentences, the SSA seemed to strike a deathblow to Social Security naysayers.
But did it, really? I went to the “Ask an Actuary” site for more information. My screen immediately filled with obtuse charts and spreadsheets detailing trust fund finances. Therein lay the problem: The trust fund is “invested” in special-issue bonds and government IOUs. In other words, the trust fund money is separated from the general fund, loaned to the federal government and then spent on all kinds of programs through the general fund. Bureaucrats get the best of both worlds: They can claim (rightly) that the money is set aside in bonds but they still get to spend it freely.
There is no substance behind the trust fund; it is a mere promise of repayment, without any money backing up that promise. Without any real assets, Social Security resembles nothing more than a pyramid scheme, funneling money from new “investors” (current workers) to those who invested from the beginning (current retirees). And like any pyramid scheme, it cannot hold out forever. The SSA itself admits that by 2018 retiree benefits will exceed worker contributions. It will run a deficit, cash in its bonds and eventually have them dissolve for all the world to see.
If we stay the course, we have two options. If we raise taxes, we would be taking money from people to repay existing debts owed to them. If we reduce benefits, we would arbitrarily declare that the government owes less money than it “borrowed” when it originally levied the tax. Both are forms of theft.
But there is an alternative. We could, the Bush administration suggests, partially privatize Social Security, giving contributors the option of investing a portion of their tax money in selected bonds or mutual funds. Some have objected that the stock market is too volatile and may not have as great of returns as the current system. To which I say, “What returns?” Social Security bonds have not been invested productively but were spent creating the largest bureaucracy in world history. (Besides, stock indexes average 11 percent, far greater than even the nominal 2 percent return on Social Security bonds.) Others believe that personal accounts would bankrupt Social Security. But the system is bankrupt already; why not try to salvage some value before it’s too late?
Twisting and turning the facts, the happy-go-lucky SSA continues to insist that Social Security is healthy. The assertions are false and futile; Social Security’s fall is inevitable and our inaction merely hastens its demise.
While we search for a solution, however, I urge you all to turn your eyes to the suffering of the downtrodden statistics. Information has rights, too. We must defend the facts against torture, against ill treatment and against the specter of factionalism. Datums of the world, unite!
Alex Binz of Burien is a research intern at the Discovery Institute in Seattle.