Another Myth about Social Security (Part 2) (Walter Williams discusses Social Security Myth)

 

Author Biography

Eric Schurenberg is Editor-in-Chief of BNET.com and Editorial Director of CBS MoneyWatch.com. Previously, Eric was managing editor of MONEY. As managing editor, he expanded the editorial focus to new interests including real estate, family finance, health, retirement, and the workplace. Prior to MONEY, Eric was deputy editor of Business 2.0. He was also the managing editor of goldman.com, a Web site for Goldman Sachs Group’s personal wealth management business, and an assistant managing editor at Fortune magazine. Schurenberg has won a Gerald Loeb Award for distinguished business journalism, a National Magazine Award, and a Page One Award.

In his article “5 Social Security Myths That Have to Go, ” Schurenberg notes:

Social Security isn’t the only cause of America’s fiscal problems, but it is Exhibit A in why it is so hard to fix them. No serious solution to our debt can ignore a program that will tax and spend about 4.8% of GDP this year and account for about 20% of all federal spending-and that within a few decades will count almost a third of the population as beneficiaries. But whenever I write about Social Security here at CBS MoneyWatch, I’m always struck by how much disagreement there is about how the system really works.

A handful of misconceptions tend to crop up repeatedly-often having to do with that fiscal fun-house mirror, the Social Security trust fund. And despite the efforts of writers like Allan Sloan and experts like the Urban Institute’s Eugene Steuerle, the myths won’t die. This column won’t kill them either, but that doesn’t mean we shouldn’t take a whack. Here goes:

Myth: Social Security benefits are earned; reducing them amounts to confiscation

It’s not hard to see why this illusion exists, since Social Security’s own website refers to “earned credits” and sometimes refers to payroll taxes as contributions. But despite Social Security’s fetish for language that echoes private pensions, no one ever vests in Social Security. You don’t own your benefits until you cash the check.

It’s more accurate to say your benefits are an entitlement granted by act of Congress and subject to change at any time by another act of Congress. As long as voters consider benefits inviolate, they will be. When voters decide fiscal responsibility is more important, then Social Security benefits- “earned” or not-will be up for review.

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Professor Williams explains what’s ahead for Social Security

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