Social Security

Like Medicare, Social Security is a pay-as-you-go program that was sold to the American people as a social insurance program when in fact it more closely resembles an involuntary Ponzi scheme. When it was first enacted during the New Deal, Social Security entailed a one percent tax on employees. After years of the retirement age and payroll tax rate being raised numerous times, Social Security now involves a 7% tax, matched by employers, constituting an effective 14% burden on the cost of hiring workers. The self-employed must bear the full cost themselves.

The dirty secret is that Social Security, modeled after a program implemented by Bismarck, the autocrat of Prussia, was always destined to be a regressive, unfair tax on the young with promises to retirees that could not be kept forever. When it began, Social Security was a comparatively tolerable tax for those paying into it. Because of shifts in demographics, we will likely see within our lifetimes a situation where for every two workers paying into the system, there is one recipient drawing a check—meaning a very severe burden for those forced to finance the program.

Learn more about Social Security problems and solutions:

“Pay-As-You-Go Government: Inter-Generational Robbery”
Burt Abrams (MyGovCost) April 30, 2012

“Should Social Security and Medicare Be Means Tested?”
John C. Goodman (NCPA) June 11, 2012

“The Flaws of Social Security”
Anthony Gregory (Human Events) September 2, 2010

“Privatizing Social Security the Right Way”
Laurence J. Kotlikoff (The Independent Review) Summer 2000

“The Anatomy of Social Security and Medicare”
Edgar R. Browning (The Independent Review) Summer 2008

“Looking South on Social Security”
Alvaro Vargas Llosa (San Diego Union-Tribune) August 26, 2005

“Allow People to Invest Their Social Security Funds”
Richard K. Vedder; August 22, 1998

See Also:

The Independent Institute’s Archive on Social Security