Face It: Social Security Is a Handout

Walter E. Williams

by Walter E. Williams: Immoral
Beyond Redemption

Some of the
responses to my column last week, titled “Immoral
Beyond Redemption
,” prove that Americans have been hoodwinked
by Congress. Some readers protested my counting Social Security
among government handout programs that can be described as Congress’
taking what belongs to one American and giving to another, to whom
it doesn’t belong – legalized theft. They argued that they worked
for 45 years and paid into Social Security and that the money they
now receive is theirs. These people have been duped and shouldn’t
be held totally accountable for such a belief. Let’s look at it.

The Social
Security pamphlet of 1936
read, “Beginning November 24, 1936,
the United States Government will set up a Social Security account
for you. … The checks will come to you as a right.” Americans
were led to believe that Social Security was like a retirement account
and that money placed in it was, in fact, their property. Shortly
after the Social Security Act’s passage, it was challenged in the
U.S. Supreme Court, in Helvering v. Davis (1937). The court held
that Social Security was not an insurance program, saying, “The
proceeds of both employee and employer taxes are to be paid into
the Treasury like any other internal revenue generally, and are
not earmarked in any way.” In a 1960 case, Flemming v. Nestor, the
Supreme Court said, “To engraft upon Social Security system a concept
of ‘accrued property rights’ would deprive it of the flexibility
and boldness in adjustment to ever-changing conditions which it

Decades after
Americans were duped into thinking that the money taken from them
was theirs, the Social Security Administration belatedly and quietly
tried to clean up its history of deception. Its
website explains
, “Entitlement to Social Security benefits is
not (a) contractual right.” It adds: “There has been a temptation
throughout the program’s history for some people to suppose that
their FICA payroll taxes entitle them to a benefit in a legal, contractual
sense. … Congress clearly had no such limitation in mind when
crafting the law.” The Social Security Administration’s explanation
fails to mention that it was the SSA itself that created the lie
that “the checks will come to you as a right.”

Here’s my question
to those who protest that their Social Security checks are not handouts:
Seeing as Congress has not “set up a Social Security account for
you” containing your 45 years’ worth of Social Security contributions,
where does the money you receive come from? I promise you it is
not Santa Claus or the tooth fairy. The only way Congress can give
one American a dollar is to first take it from some other American.
Congress takes the earnings of a person who’s currently in the workforce
to give to a Social Security recipient. The sad fact of business
is that Social Security recipients want their monthly check and
couldn’t care less about who has to pay. That’s a vision shared
by thieves who want something; the heck with who has to pay for

there’s the fairness issue that we’re so enamored with today. It
turns out that half the federal budget is spent on programs primarily
serving senior citizens, such as Social Security, Medicare and Medicaid.
But let’s look at a few comparisons between younger Americans and
older Americans. More than 80 percent of those older than 65 are
homeowners, and 66 percent of them have no mortgage. Homeownership
is at 40 percent for those younger than 35, and only 12 percent
own their home free and clear of a mortgage. The average net worth
of people older than 65 is about $230,000, whereas that of those
younger than 35 is $10,000. There’s nothing complicated about this;
older people have been around longer. But what standard of fairness
justifies taxing the earnings of workers who are less wealthy in
order to pass them on to retirees who are far wealthier? There’s
no justification, but there’s an explanation. Those older than 65
vote in greater numbers and have the ear of congressmen.

12, 2012

E. Williams is the John M. Olin distinguished professor of economics
at George Mason University, and a nationally syndicated columnist.
To find out more about Walter E. Williams and read features by other
Creators Syndicate columnists and cartoonists, visit the Creators
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© 2012 Creators Syndicate, Inc.

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