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Another Statist Crisis: US Welfare-state Deadbeats Helping One Another

Writers Articles And Opinions

28 March 2010

By Jacob G. Hornberger

Yesterday, the New York Times published an article detailing another statist crisis involving the U.S. welfare state. This time the crisis involves the crown jewel of America’s socialist programs, Social Security

According to the Times, “This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.”

But what difference does that make? Isn’t there a Social Security fund, one in which people deposit their money, which then earns interest, and which they can later withdraw when they reach old age, like a private savings or retirement account? Isn’t that what so many Americans convince themselves? “I put it in and I have a right to get it back!” they exclaim.

Historically it’s been primarily the libertarians who have had the courage to pierce through the lies, deceptions, and delusions of this socialist program and confront directly the ugly reality of this anti-family socialist program.

The truth is that Social Security is just like food stamps and every other welfare-state transfer program.

With food stamps, people are taxed and the money is given to poor people. There is no food stamp trust fund.

It’s no different with Social Security. There never has been a Social Security fund any more than there has been a food-stamp fund. And nobody has “put in” to Social Security. Instead, they’ve simply been taxed over the work lives, with the money put into the overall general fund that pays for food stamps, Social Security, the drug war, foreign wars of aggression, and other socialist and imperialist programs.

What was astonishing about the New York Times piece was that it actually acknowledged reality: “Although Social Security is often said to have a ‘trust fund,’ the term really serves as an accounting device, to track the pay-as-you-go program’s revenue and outlays over time. Its so-called balance is, in fact, a history of its vast cash flows: the sum of all of its revenue in the past, minus all of its outlays.”

When young people lament that Social Security might not be available for them when they get old, what they’re really expressing is a concern that officials won’t be able to collect sufficient taxes to fund their retirement. But why not? Couldn’t U.S. officials simply continue to increase taxes — say, to 90 percent of people’s income — to continue this Ponzi scheme indefinitely?

Well, possibly. But young people might start wondering how valuable life is if 90 percent of their work life is enslaved to government. Moreover, at some point the entire debt and tax burden of the welfare state can get so heavy that it caves in on itself, as it has now done in Greece.

By the way, since Greece’s welfare recipients are refusing to let go of their largess, Greek officials have been looking to Germany to bail them out. However, hard-pressed German taxpayers are saying, “No way!”

So, Greece is now considering asking the IMF for a bailout and, coincidentally, President Obama has just asked Congress to approve an emergency $108 billion credit line to the IMF.

How compassionate! One welfare-state deadbeat helping another.

Jacob Hornberger is founder and president of The Future of Freedom Foundation.

EsinIslam.Com

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