The Great Social Security Hoax

Members of the media, politicians, and millions of Americans have become convinced that the Social Security Trust Fund is soon to go broke. Most of us have accepted the idea that the millions who live in hope of security in their retirement years are instead going to find themselves penniless and bereft; that our Social Security system is basically bankrupt — not now, but soon.

Is the Social Security system really failing?
When we at the Spirit of Ma'at set out to research the "failure of Social Security," the validity of this concept was not in question. We were at first looking to discover how to solve a problem that we implicitly believed to exist.

Instead, we have found something quite startlingly at odds with the commonly held view. According to our research, the coming "bankruptcy" of the Social Security Trust Fund is a lie.[1] It is something we believe in because of an amazingly successful...

Social Security propaganda program
Looking at the true state of affairs, instead of the manufactured statistics we have been fed, it seems that unless our economic condition in coming decades parallels that of the Great Depression, the Social Security system is not in danger. (In fact the very people who are predicting the failure of the Social Security Trust Fund in the coming decades are predicting a financial boom during these same decades.[2])

The wildly pessimistic projections are based on assumptions that the economy will grow an average of 1.8 percent per year for the next 75 years — less than half the rate of the previous 75 years. Even in the 1930s — the decade of the Great Depression — the growth rate was faster than that!

If the economic situation really does match the performance upon which the doomsayers' prophecies rest, we will have a lot more to worry about than Social Security.

Consider, however, what would happen if the economy grew at the more likely 2.4 percent rate? In that case, the Fund would be flush for the next 75 years, and in fact would run with a surplus. (Incidentally, a 2.4 percent growth rate is exactly what the White House budget predicts for the next five years.(4))

Mark Weisbrot, Center for Economic and Policy Research, states:

The [so-called] "President's Commission to Strengthen Social Security" is anything but that. The standard projections which are used by the Commission assume the slowest economic growth in the nation's history. Yet they still show that all promised benefits will be paid for over the next 37 years without any changes at all. In order to argue that Social Security is "broken," the Commission wants to pretend that the $1.1 trillion of U.S. government bonds held by the Social Security Trust Fund are not worth anything. Try telling that to Salomon Brothers, Bill Gates, or any billionaire or pension fund holding U.S. Treasury bonds.[3]

Robert Reich, former trustee of the Social Security Trust Fund and also a former Secretary of Labor, states the case flatly: "Social Security is not endangered."[4]

If it's true that we are being purposely "softened up" for a change in the Social Security system, why? To answer this question, we need to ask another:

Who Benefits?
From what we have been able to learn, the notion that Medicare and Social Security are going broke has been a great hoax, perpetrated repeatedly since 1975 in an effort to eventually privatize the Social Security system. Whole generations of Americans have thus been purposely frightened into believing that these programs will not be there when they are needed.

Because of this belief in the coming bankruptcy of the Social Security system, the American population has an attitude of placid and compliant acceptance when Medicare benefits are cut, or when the age at which Social Security benefits may be received is increased.[5]

And — unless we quickly educate ourselves — there will be no murmur of protest when the government admits its "failure" to manage the Social Security system and turns it over to private corporations.

If that happens, the end result of our belief in the failure of the Social Security Trust Fund could be twofold:

A huge increase in the amount of money available to managers of the Fund (through reduction of benefits paid), and

The placing of that money in the hands of private corporations.

With a privatized Social Security system, government-backed corporations would be able to use the giant sums of money thus made available to their own ends — including the manipulation of the stock and money markets. And the government would be able to invest its stake in the market.

Government-backed investment: a cautionary tale
For an example of the hazards of government-backed investment in the stock market, we need look no further than the activities of our former president Bill Clinton.

As Arkansas's governor in the mid-1980s, Clinton and his banker, Jackson Stephens, put a big chunk of the State Pension Fund into high-risk investments. The brokerage firm involved suddenly went belly-up, and the State Pension Fund dropped 15 percent overnight.

Facing a $52 million loss, Clinton was saved in the months immediately after the disaster when his ubiquitous buddy, Mochtar Riady, stepped in and bought 40 percent of Stephens's Worthen Bank.[6]

The key to the future is awareness
In the end, having enough money for Americans in their old age is a matter of political choice, not economic destiny. And awareness is the key to enforcing the wise choices that will secure our future.

If we allow ourselves to be manipulated by those who want us to accept a lower standard of living, it's very possible that the money will be spent on missiles or corporate wellfare, and that it won't be there when we need it. Through fear and ignorance, we will have given it away.

And if we look closely at the scenario that is being portrayed and demand that the money be there for its intended use, then the Social Security system can continue on its already healthy course.