Social Security’s Junk Mail

I think I need to contact the postal inspector to report a case of mail fraud.

I’m worried because I got my “Social Security Statement” in the mail last week. It’s the four page pamphlet put out by the Social Security Administration that says it is “Prepared especially for Christopher J. Kinnan.”

That’s so kind of Uncle Sam. The federal government makes off with 12.4 percent of my income (my payments and my employer’s payments on my behalf), and I get a cheap brochure. At least the bankrupt Internet stocks I bought sent me glossy annual reports with nice photos as they frittered away my money. And, with those crazy ‘Net stocks, I did have the possibility of some big returns. With the Social Security rip-off, there’s only downside risk.

To someone’s credit (a Bush Administration appointee, perhaps?), my Social Security Statement does provide some hints to the program’s future. In the description of my

“Estimated Benefits” it says, “Your benefit figures shown here are only estimates based on current law. The laws governing benefit amounts may change because, by 2041, the payroll taxes collected will be enough to pay only about 73 percent of benefits owed.”

That’s good to know. Social Security’s shoddy returns of 1 or 2 percent are probably going to be even shoddier for my generation.

What’s really frustrating is the perception the “Statement” tries to convey, which is the idea that I’m somehow part of some kind a retirement plan. That’s utter nonsense. There is no Social Security Trust Fund, and there is no guarantee. Right now, Congress is making off with the Social Security surplus and using it to pay for regular government operations. So my retirement “savings” are actually subsidizing Amtrak operations in Mississippi this year.

The government, at its whim, in turn may or may not decide to give me some money when I turn 67. That’s what I get in exchange for kicking in 12.4 percent of my income over my entire working life. At best, Social Security is just another kind of income tax. At worst, it’s a form of indentured servitude—if the Man is so kind, and if I make it to age 67, I too might be included in the lucky ranks of Social Security winners.

Except, even in retirement, it’s a bad deal for most recipients! The returns on our Social Security “contributions” are absolutely pathetic. We’d be better off if we could just put that 12.4 percent of our income into some bank savings accounts. That’s what makes the program so outrageous. Too many Americans are dependent on only Social Security’s measly checks for their retirement income. What are the liberals really defending here? A program that, for those most dependent on it, keeps its recipients tottering on the edge of poverty? That’s not retirement security. We must do better.

There’s a better way to treat workers more fairly, and provide a way for poor Americans to start accumulating real wealth and assets.

Contrast the form I received in the mail with the statement I’d get if we had Personal Retirement Accounts (PRAs) for Social Security. A PRA statement would list real assets—stocks and bonds—that I own. These assets would provide real rates of return, not a non-convertible government IOU. My quarterly PRA statement wouldn’t be a vague promise “based on current law.” If I don’t survive to retirement, my family or favorite charity could inherit my account. That’s a far cry from today, where Uncle Sam only pays a measly “survivor’s benefit” to your spouse and underage children.

Personal Retirement Accounts are a great idea. This is America—we believe in honest savings, investment, and personal ownership. It’s time to reform the Social Security pyramid scheme and start letting hard-working Americans own a little bit of their own retirement savings. Lets make our “Social Security Statement” mailings something worth actually reading.