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Three Texas Counties Opted Out of Social Security


Democracy and Power 106:  A politician receives no financial gain for good policy or punishment for bad policy.

It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong. – Thomas Sowell

Three Texas Counties Opted Out of Social Security

Merrill Mathews of the Wall Street Journal showcases three counties in Texas that opted-out of Social Security by creating personal retirement accounts for county employees.  After 30 years, the county workers in these three counties:

”…retire with more money and have better death and disability supplemental benefits.”

Unlike the federal Social Security system, which has gigantic unfunded liabilities, the three counties are solvent.

“And those three counties—unlike almost all others in the United States—face no long-term unfunded pension liabilities.”

With essentially the same contributions, the county workers’ will receive roughly twice the retirement income as compared to those in the federal system. 


In these three counties, the money is saved and invested.  Conversely, in America’s federal system, the Social Security taxes are transferred immediately to current retirees, and when there were surpluses, politicians use the money for other government functions.   Thus, America’s federal system has no money saved and because of fewer workers supporting retirees, America has enormous unfunded liabilities.  The difference is saving and investment growth versus the federal government's taxing, transferring and spending. 

The Texas counties that chose private accounts used professional money managers competing for the opportunity to invest their money.  As a result, the employees are guaranteed a minimum rate of return.  Unfortunately, American workers have no choice to invest a portion of his or her Social Security tax.  Just the opposite.  Government imposes taxes and federal politicians determine how and when the benefits, if any, will be distributed.  Worse, the government implies there will be benefits at retirement.  However, future politicians will determine which Americans receive benefits and the age of eligibility

A saving and investing system has enormous benefits to all Americans.  Obviously, twice the amount of money for retirement is good.  Equally important are saving and investing, which helps propel commerce and industry.  A nation of savers is more dependable and solvent than a tax, raid, and distribute system, which has proven to create enormous unfunded pension funds.

Unfortunately, seniors and people nearing retirement fear any change to the present system.  Deplorably, politicians pander to seniors and excoriate any mention of a save and invest program.  Thus, in a time of great need to increase saving and investing, the vast majority of America’s politicians are intentionally contriving against the necessary change.  Most politicians are silently saying, “I want to be elected and in power.  Good policy and expanding economic prosperity be damned.”

Personal accounts for retirement and medical needs are absolutely essential for personal freedom and a vibrant society.  America’s critical task is how to exit the corrupt political system and create personal accounts.


I hope that Social Security and Medicare will finally receive scrutiny from the general public. My own political awakening came when Obama and the super-majority Dems passed ObamaCare. It’s an outrage that our government forces us to purchase a product as a condition of lawful citizenship.

Of course, they’re trying to pass it off as a tax. The same was done for Social Security. It was sold to the public as an insurance policy and sold to the Supreme Court as a tax. How much of our freedom are we willing to surrender?

But, as Ted points out, it takes a plan to transition from the current scheme. To that end, I’ve started a petition on the President’s “We the People” website. The petition calls for optional entitlements. Allow America’s youth to opt out of Social Security and Medicare. At the same time, allow older Americans the option to remain in the entitlement programs.

To make this transition possible, we also need to gradually reduce the entitlement benefits. I don’t think anyone wants to rob senior citizens, so give them what they were promised. But, benefits should be reduced based on the year in which an individual was born. This will provide an incentive to America’s youth to opt out.

Without reform, everyone - including current beneficiaries - will have his/her benefits cut by 24% starting in 2036. That was the Social Security Administration’s most-recent projection. But, they made that projection before Obama started to gut the program with his reduction in the “payroll tax.”

If you’d like to read more about my ideas on tax and entitlement reform, go here:

If you’d like to support the cause, you can sign the petition here:



I researched Merrill Matthews, the author of the article about the theree counties, and from whom everyone else seems to quote. He is a health policy expert and the past president of the Health Economics Roundtable for the National Association for Business Economics, the largest trade association of business economists. IN OTHER WORDS, he is in the back pocket of big business, which would stand to gain from private investments in Social Security. This makes him BIASED. EVEN IF HE WEREN'T, his background doesn't make him qualified to talk about Social Security vs. private investment. In other words, his opinion and $10 will get you a latte at Starbuck's. Consider the source before accepting what someone says. If Barack Obama had said this, you would be thinking he was full of it. But because the person is a Conservative, he MUST be right? Chew it over before you swallow it blindly. Think, first. That's all I'm saying.


This should not have posted twice. When I tried the Captcha, it said I was wrong the first time. Sorry about the overposting.


“The most powerful force in the universe is compound interest”. Albert Einstein

The key is to start your savings account when you start work and don't touch it for "emergencies."

Wesley Lennon

@1LeadDog, the three counties are: Matagorda, Brazoria, and Galveston...It is a brilliant plan and should be national...but I see that Ted came up with the county names.

teda's picture
Ted Abram

Yes, savings and compound interest is the powerful means to accumulate a large nest egg. Deplorably, debt and compound interest on the debt is just the opposite. The federal government is compounding the debt debacle everyday. The obviously must be stopped.

The three counties are: Galveston, Matagorda and Brazoria


Try clicking on the article's title, the one that is underlined. That will take you to the original article that names the counties and gives more details.


Shame the author did not name the counties. Is this a verifiable story or make believe to make a point? I personally think Social Security is a pyramid scheme.