Obamacare: Social Security Redux

As millions of Americans are smarting from the inanities of Obamacare, we must not forget another similar liberal scam that has been perverting our economic lives since the 1930’s: Social Security. Over the past 50 or so years Social Security has returned about 1.6% while the average return on invested capital in the United States has averaged over 8%. One reason for this is the vast Social Security Administration which is so rotten to the core that some of its employees have retired on disability from the stress of going to work and having nothing to do. But the primary reason for the low return is that it’s invested totally in US government debt. In other words, it’s just a scheme for the government to borrow even more money that it has no feasible way to pay back.

Last week I received a letter stating that the Medicare benefit portion of my Social Security will be reduced for 2014 based upon my “income” in 2012. But in 2012 I was negative cash flow and was forced to buy groceries with credit cards. However, I withdrew money from retirement accounts in that year to repair my roof and install a solar energy system. That made me a high income person under their arbitrary criteria. However, my basic monthly Social Security amount is very low because for many years I was engaged in owning and maintaining residential rental properties. I could not have paid into Social Security even if I wanted to because my income was considered “unearned income”.

During those years I routinely cut out rotten waste plumbing pipe. Often I would be covered from the neck down with their contents. (But I won’t be more graphic in describing those contents since I’m not an eloquent MSNBC commentator like Martin Bashir.) At that time I often thought of photographing my effluent covered self, pairing it with a photo of a Senator dining at a fancy DC restaurant with a lobbyist and sending it to Congress with the caption: Which of these activities creates earned income? During the Depression there was plenty of work according to my father, but since wages were so low many people didn’t bother. But he didn’t want to be poor, so he worked three jobs. Two were daytime sales jobs for differing wholesalers and then a graveyard shift as a drop forge laborer. Because his efforts made him higher income, he paid into Social Security at the maximum rate from the day it went into effect until his last paycheck was received after he was already dead and in the ground at age 49. Where did that money go? Probably into the monthly checks of someone who took too much LSD and drank too many beers in the 1960’s and is now “disabled”.

When my mother retired she was unable to collect on my father’s Social Security and instead received the lower benefit my stepfather had earned. But she did get a $500 dead benefit and my brother and I were able to go to college on a benefit that lasted until we were 22. My average check was about $93 a month. These sums received were a small pittance of what my father had paid in without even considering about 30 years of interest or investment income.

In the peak year of 1977 about 900,000 students received the Social Security survivors’ benefit for college. Ending this benefit during the Reagan Administration is certainly a contributing factor to the current student loan mess. How stealing someone’s money is considered by some as a legitimate means to shore up Social Security baffles me. The money we pay into Social Security is our money despite it being called a tax. That is why payments into Social Security are not deductible from the computation of taxable income, unlike state income tax or other items. All these rules, terms and definitions define how we live and hopefully prosper in a manner seemingly divorced from reality. All I can conclude is that

Washington must indeed be a very strange place.

Copyright 2013, Mark L. Bennett