Ron Paul: Why the Government Lies About Social Security

Why the Government Lies About Social Security

by Ron Paul

Perhaps the biggest media story of 2010 was the influence of Tea Party voters on the Congressional landscape. The new Congress comes to Capitol Hill with a mandate to end profligate spending and restore fiscal sanity in Washington, we are told. But when the House and Senate convene in January the newly elected members will face tremendous pressure to maintain spending levels for entitlement programs. Even the most modest proposals to trim Social Security or Medicare spending will be met with howls of indignation and threats of voter revolt. Legislators who propose any kind of means testing or increased retirement ages can expect angry visits from senior citizens and lobbyists ready to fund a candidate back home who supports the status quo.

But millions of Americans now realize that the status quo is an illusion that will not last even another 10 or 20 years. The federal government cannot continue to spend a trillion dollars more than it collects in revenue each year because we are running out of creditors. Fiscal reality is setting in and the consequences may be grim, even if Congress finds the courage to take decisive action now.

Courage begins with a commitment to see things as they are, rather than how we wish they were. When it comes to Social Security we must understand that the system does not represent an old age pension, an insurance program or even a forced savings program. It simply represents an enormous transfer of payment with younger workers paying taxes to benefit the other beneficiaries. There is no Social Security trust fund and you don’t have an account. Whether you win or lose the Social Security lottery is a function of when you happen to be born and how long you live to collect benefits. Of course young people today have every reason to believe they will never collect those benefits.

Notice that neither political party proposes letting people opt out of Social Security, which exposes the lie that your contributions are set aside and saved. After all, if your contributions are really set aside for your retirement, the money is there earning interest, right? If your money is in your account, what difference would it make if your neighbor chooses not to participate in the program?

The truth of course is that your contributions are not put aside. Social Security is a simple tax. Like all taxes, the money collected is spent immediately as general revenue to fund the federal government. But no administration will admit that Social Security is nothing more than an accounting ledger with no money. You will collect benefits only if future tax revenues remain high. The money you paid into the system is long gone.

My hope is that at least some members of the new Congress will cut through the distortions to see Social Security as it really is. The best way to fix the impending Social Security crisis is also the simplest: Allow younger individuals to opt out of the program and use their tax savings to invest privately as they see fit. This is the true private solution. Your money has never been safe in the government’s hands and it never will be.


  • DeleteMeOnline

    In this situation, we cannot fail to be the object of envy and resentment. Our real task in the coming period is to devise a pattern of relationships which will permit us to maintain this position of constituionality.To do so, we will have to dispense with all sentimentality and day-dreaming; and our attention will have to beconcentrated everywhere on our governments Neoliberal national objectives.

  • DeleteMeOnline

    The day is not far off when we are going to have to deal in straight power concepts.The DoD/HMS/TSA/LE is now the parental control of the coercive institutions of ordinary life,our subordination to higher-ups
    and blind loyality to hierarchic institutions is proof of a liberty robbing neoliberalistic government.

  • LoveHolsters

    Look pal – I have no problem knowing I help out the elderly with the money I have put into it and the deal is the promise continue to my generation as well. I don’t give a rats ass about ignorant view’s poverty is all about hand outs w/ unemployment at 19% percent. Also tired of hearing republican drones talk about being poor is all about lazy people – class warfare is real. .
    Not going to accept a bankrupt social security system as long as they continue to fund bigger government on our backs.

  • LoveHolsters

    Yea sure you can rob me of decades of pouring money into Social Security because we have a new meaning for SS in America and it needs funding.
    It’s not a whole lot but my latest record shows I have paid about $30,000.00 in that one tax already and have a long way to go. For suit’s to sit there and tell me by the time i finish paying out there wont be anything left. Like hell – if I make it that long-your not telling me that I am not getting anything back. Put that in your pipe and smoke it.

  • Doug

    No, it’s Democratic Party, not “Democrat Party” because a noun cannot modify another noun. You have to use an adjective to modify a noun.

    There IS a trust fund– its in the same form as the military pension trust –US Treasury securities, the most secure investment there is.

    Its worked very good for 75 years and beats the hell out of the system we had before the SSA — the county poorhouse.

    • bizwags

      Your wrong answer/response is exactly my point. Think about the other parties for instance: Tea, Communist, Birthday, etc. Aren’t those nouns?

    • bizwags

      Oh, by the way, there is no “trust fund” and SSA is the “county poorhouse”.

    • bizwags

      Oh, I get it; an adjective. OK, “THE” Democrat Party. Come on, raise your standards and be particular. Don’t settle.

    • tj

      Doug…with all due respect, US Treasuries are no longer the safe investment they once were…the Chinese are now beginning to invest in gold rather than US treasuries…the Fed has just monetized some of this safe debt.and soon the US will default on many of these Treasuries….this wonderful program SS you like so much is virtually bankrupt…and will only get worst as revenues are falling short of payouts…and in 2011 more people will file first time ss claims than ever before at a time when more people are unemployed…social security will end and there is nothing you can do about that…
      also, since you are the one giving grammar lessons….your statement about ss is incorrect…you used the word “Its” when “It has” or “It’s” should have been used. Also, the adverb “well” should be used instead of the adjective “great”.
      Let freedom (which means small government) be with you…tj

      • bizwags


        You are correct. Very well stated. Thank you.

  • permisiontospeak

    The government lies about Social Security b/c the people CAN’T HANDLE THE TRUTH.

  • rjbrb

    All the talk won’t fix anything until everyone joins together. I offer the truth (FREE) about the existing laws that can fix this problem, laws the IRS, DOJ & congress disobey because everyone DOSEN”T KNOW about them. They abuse one person who tries to do the right thing, BUT a group of citizens(VOTERS) can force the change,& can offer protection in a group settings.( Town Hall) Why is it know one wants a 35% raise? My guess is lazyness, & being afraid. E-mail me for info, and watch them run!

    • bizwags

      Let’s see what you have to offer…

  • lovedalord88

    A man who wants to end social security, the WAR ON DRUGS, Corporate Welfare as well as a slim trim of poor people welfare?!


  • Escapification

    seriously americans, why the hell havn’t we elected this guy as president already.

  • diah4

    I will never put my money in the hands of the govt. They have no choice but to take it from me, b/c they are not trustworthy. These are suppose to be bright people, but they are the most irresponsible people I have ever seen. Ron Paul for president 2012. Please run Ron. Your are the only one speaking with any sense. All I ask is once we put you there, do not fold under the pressure of the status quo and the goons in house/congress. They love the status quo despite the fact it’s no good for us.

  • tubester4567

    Ron says you cant trust the government with money…….a couple of years after every private bank, insurance company, and wall street went completely broke. Millions lost their private investments and retirement funds that the right wing says we need to do. Great advice conservatives thanks. Oh and who got the system back on track? , the government. Ron Paul doesnt care about people, just his big corporate mates.

  • rk92559

    Like Ron..but he is dead wrong. Everyone thinks they are Warren Buffet and can make a killing with their money. People have pros invest their retirement and still lose it all. What you will end up with, is a bunch of these young investment wizards going broke, and when they are old they will have nothing. So we will end up putting them on Medicaid and welfare. So in the end we will have to pay for their dumbasses without them contributing anything.

  • Citizen

    This Pyramid Ponzi Scheme has been going on far too long to now have any reasonable remedy.

    Social Security is our biggest Unfunded Mandate Liability and the money simply is not there.

    There are only two solutions.
    1. Government continues to monetize the payments by printing un-backed currency and diluting the money stock, which has been our Government’s choice for the past 6 decades. Eventually the ponzi-scam will collapse, maybe sooner 3-5 years rather than later 10 or more years
    2. Admit the Error and phase out the program all together. Only cover 50 years and older recipients and require PRIVATE retirement savings accounts for everyone under 50 years. Putting 15% per year of your income from age 50 on would result in a very healthy private savings retirement account.

    BUT… Our GOVERNMENT has been spending the Social Security tax receipts FASTER then they are collected. Its not likely that our Political Elite will “GIVE-UP” those fat tax revenues and tighten the fiscal belts.

    Bottom Line… Collapse IS Inevitable

  • edmondov

    the problem with privatizing social security is not every one will save and they will end up being old bums in the streets. and please don’t give me that charity nonsense.

  • LoveHolsters

    Secrets can also become a cover story for reality of some things maybe we should be aware of and evaluate which I believe is a god given function of our brain for survival. This human evaluation process tells me secret atmospheric projects are out of control now they want to talk about “we all have to pay the price” no kidding. Look what were paying for in chem-trail planes alone. We are not your scientific slaves and there is only so much we will stand for –
    Stop BS’ing on UFOs were not stupid

  • LoveHolsters

    Thanks Ron Paul – Twice they raised age of retirement on the stance work till you drop in America ever since 1776 became 1996. Now they say SS is insolvent and we must all pay the price. Meaning all of us while the fat bastard continues to grow bigger and bigger until it pops pork fat everywhere. Ron Paul the American people may be resilient and show great restraint and for that we should be proud but enough is enough. They are trying to turn the country into some kind of Secret Police State.

  • elmuraddi

    It is shame (unfortunate) that I’m not a USA voter. (Peter Spiriev from Hungary,Budapest) I should have helped this man Ron Paul to White House. Very Clever Man! Also very clever wiews at “foreign politics”. Hope he can make it!

  • HeadoftheHydra

    I would use my SSI money to buy silver if I could opt-out.. At current prices, 2 weeks pay could get me 2 oz. or so.

    Yes, I’m not a very highly paid worker. College student ftl. 😀

  • friedlogic

    you have my vote. (sic)

  • earlej7456

    Dr. Paul, your political comments remind me so very much of my dad’s beliefs…at first, I thought you were way off base, because I hadn’t heard anyone speak like you in so many years…but, given some thought, you are absolutely right in so many ways. Thank you for your insight. Without you opening new minds to old ideas, we might never have a chance to rediscover these truths!