From around the web
An entitlement is defined by Websters as:
- the state or condition of being entitled, a right to benefits specified especially by law or contract
- a government program providing benefits to members of a specified group; also, funds supporting or distributed by such a program
- belief that one is deserving of or entitled to certain privileges
But, does this definition apply to social security? For your whole work life you are required to pay in 6.2% of your gross income into social security. Your employer is required to match that amount. So 12.2% of your gross income is put away for your retirement (kind of).
Getting your own money back does not seem like an entitlement program to me by Websters definition. Also, aside from federal employees we are all required to pay into the system, making the “specified group” quite large indeed.
Lately there isn’t a month that goes by without hearing something bad about Social Security. We’ve all heard the bad news… “It’s going bankrupt”…It’s going to bankrupt the country”…”It should be privatized” …and the worst of all…It’s an entitlement program”. Well, it’s high time to set the record straight on one count anyway! That being Social Security constantly labeled as an entitlement program by the government, Wall Street and most of the major media outlets. The entitlement label is just plain wrong and should absolutely infuriate anyone who has paid into the system for any length of time. Here is the short version of why the entitlement tag should not be applied to Social Security.
This brilliantly conceived public program instituted by FDR has always been fully funded by employers and employees, without any need for government subsidy. The program is simple and has worked flawlessly for over 60 years. It’s operating funds are deducted from an employees salary and matched by the their employer. These funds are invested in a general fund that earns interest, ensuring the program remains solvent. In essence, Social Security can not be labeled an entitlement because the money being issued to recipients of the program is actually theirs to begin with!
Here is a perfect example of why the entitlement tag should not be applied to Social Security. We recently spoke to an individual who operated his own business for over 20 years. The business had only one employee, that being him, the operator. In that time fame he paid both the employer and employee portion of Social Security. The reason this example is perfect is that everyone is funding their SS account the same way as this man, e.g., your employer is paying the other half of your SS payments. Most people who do not own a business are unaware of this simple but hugely important fact.
Eight years ago the gentleman became totally disabled due to a non work related illness. Although he had a private disability plan it only covered him for five years. His savings soon ran out and he filed for Social Security disability. After a lengthy process he was approved and he now collects a Social Security disability check each month.
Our point in telling this story is this. Since this gentleman is collecting money he paid into the SS system for over 20 years, should this be labeled an entitlement? We emphatically say NO…and here is the reason why…
During the application process the gentleman researched what he had paid into the Social Security program over the 20 years owning his business, plus 10 or so years of working for someone else before that. Remember that he had paid both the employee and employer portion of SS while he owned and operated his business. What he found out was astounding. Without throwing a ton of figures at you, the man told us that he calculated that, in over thirty years, with interest, his SS account had accumulated well over $700.000.00. His monthly disability check from SS would amount to 2.300.00. In short, his SS account would support him for over 25 years! Since the 700K was money he invested in the program, how can the small monthly income he receives ever be considered an entitlement?
The only entitlement label that can be attached to Social Security is our politicians idea that they are entitled to take (steal) non repayable loans from the program which they have done for more than 30 years. This, not the advent of Baby Boomer retirement has jeopardized the most well run and completely solvent Government program in this nations history. Referring to Social Security as an entitlement program is not only incorrect but extremely offensive to all the hard working people who have paid into the program for many decades.