Social Security Should Be Abolished
Debate Rounds (5)
Under the Constitution of the United States, the Federal Government was limited to 20 enumerated powers or areas and according to the 10th Amendment, all other areas are reserved to the states and the people. This would clearly put the issue of retirement outside the scope of the national government. When the Supreme Court took up the issue in 1937 it used the preamble of Article 1, Section 8 claiming that the phrase "to promote the general welfare" rendered this program constitutional. Ironically, anti-federalists opposed to the Constitution seized upon this very argument and James Madison answered in Federalist 41 that this was a general summary of the specifically enumerated powers or areas as opposed to an unlimited power.
Argument #2 - Social Security is Not an Insurance Program
Social Security taxes are not premiums and create no wealth. These taxes are used to pay people have reached the program's age of retirement. It's a straightforward transfer of wealth from one generation to the next. Private insurance companies invest premiums creating real wealth and later the earnings from this are used to pensions.
This is also where Social Security operates more like a pyramid scheme. This requires an ever expanding base of new investors to appear to be successful, but eventually the whole thing collapses when there is a decrease in the new investors. These are illegal in all 50 states, yet our government runs an identical program that in 1940 had a very large run adjusted for inflation to one that is next to nothing today.
Argument #3 Social Security is Compulsory
Social Security is anathema to liberty and freedom and the so-called contributions are taken by compulsion. Taxes are taxes. Many people buy into the myth that that they paid in therefore they a right to receive benefits, but they seemingly forget that in 1960 this issue was addressed by the court and struck down. The Court holds that no individual has property rights to their so-called contributions. Congress is free to cut benefits, raise the age of retirement and increase the tax at any point in time as further evidence.
Argument #4 Social Security is Bankrupt
In 2010, there was a deficit of nearly $50 billion in terms of taxes collected versus benefits paid out. When we look at the infinite event horizon into the foreseeable future the unfunded liabilities of the program are around $13 trillion. The ratio of workers paying the tax will begin dwindling down rapidly as over the next 19 years 10,00 babyboomers will retire daily adding to the burden. This is clearly unsustainable.
Argument #5 Retirement is a Personal Responsibility
As in many aspects of life, each adult in society has responsibilities such as employment, housing, paying bills, et cetera and this true of planning for retirement. There are a wide range of personal initiatives from personal savings, private insurance companies, investments, bonds, and so forth that could help the individual secure their future retirement. All of those options are vastly more profitable than simply relying on Social Security, which has a very poor return and is subject to many alterations to address the demographic realities.
Con is correct that in Federalist 41(paragraph 23-26) Madison only considered the welfare clause to be a general summary of the powers of Congress spelled out later in the document. Federalist 41 is from the federalist papers which are not legal documents, only descriptions of the constitution. Federalist 41 contains only Madison's opinion of how the General welfare clause should be interpreted and was published in bound form after the constitution had reached its 9-state threshold for ratification. While the federalist papers are considered to be important accounts of the intentions and views of the founders, they have little effect on the actual passages of the constitution itself. Alexander Hamilton disagreed with Madison's approach and thought that it should be interpreted broadly .
If the writers of the constitution did not care to be specific about what the general clause meant within the constitution itself, then later generations are allowed to interpret this clause in the most reasonable manner from the text of the constitution itself. James Madison was only one of the writers of the constitution.
The General welfare clause is in article 1 section 8 of the constitution .
"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;"
By a simple reading of the constitution it is saying Congress can impose taxes to promote the general welfare of the US. Social security falls under this category. While Madison thinks this clause is only a summary of specified powers found later in the constitution, it can also be regarded as directly specifying congress's powers and later parts of the constitution as going into more detail. What matters is that the constitution can be reasonably interpreted to allow Social Security so it is constitutional. Whether or not others can also interpret it differently is irrelevant.
Anyway, even if Social Security was unconstitutional, rather than perminently abolishing Social Security, an amendment should be added to the constitution. As Con I can easily argue that instead of abolishing Social Security, the constitution should be amended.
Response to Argument #2
Social Security is an insurance program in that everyone pays fees in order to obtain a service when it is needed. The whole point of an insurance program is that you can have access to an expensive service at reduced to no direct cost by paying annual fees every year and that is what Social Security is. While Social Security differs from private insurance it does provide insurance.
A Ponzi Scheme is one for example where a company promises that money you invest will get 100% returns. The way they pay for this is that as the entering number of members increases, they use this money to pay off older members plus their interest. Since the scheme pays out more than people put in, it depends on getting its pay-out money from increasing membership. However, once the number of new members decline, the scheme will no longer be able to pay their older members and the whole thing will fall apart.
Social Security on the other hand only requires an increasing number of new members only if the number of older members increases dramatically. Over the years, Social Security has collected a 2.5 billion dollar surplus so if the number of older members temporarily rises, things are still ok. Also, if there is a funding problem social security taxes can rise or benefits can be cuts. So Ponzi schemes are wrong because they are fraudulent and unsustainable while Social Security is none of those things. Politifact a non-partisan fact-checking organization rated this claim false .
Response to Argument #3
Con is right that Congress is free to cut or eliminate Social Security benefits but this allows Social Security to be sustainable in case the number of recipients rises dramatically. While social security taxes are compulsory, many other things are like taxes for military, fire department, police, highways, etc. I will be arguing that social security like these other things promote the general welfare of society so it should be compulsory.
Response to Argument #4
The claim that social security is bankrupt was also reviewed by politifact. The issue here is that you are broke if you can't pay your bills, however Social Security is still being offered .
Others have argued that Social Security is near broke. Social Security taxes are put into a trust fund and for decades more money has been put into this fund than has been taken out so the money in this fund has been built up to 2.5 trillion dollars. Just recently, more money is being removed from Social Security than is being added by 50 billion dollars per year. This shortage is due to the recession and as the economy gets better this deficit will temporarily vanish, however things will eventually get worse over time.
It is estimated that by 2036 this trust fund will be depleted and that is when Social Security is bankrupt. So social security right now is nowhere near bankruptcy today . This problem can be alleviated by reducing social security benefits and raising Social Security taxes.
Response to Argument #5
I agree with Pro that retirement is a personal responsibility. Even with Social Security, a significant amount of retirement will be funded by the people themselves because Social Security does not pay for all of it. This requires personal responsibility.
Social Security only makes retirement more affordable just like the government has made college more affordable by paying for a large amount of tuition. While there are private plans for retirement, they are not affordable to unemployed individuals, or lower-income individuals many who earn $15,000-$25,000. The people who need Social Security the most are the poor and they benefit the least from private insurance.
Think about where we are today:
Food and energy costs are rising.
Healthcare costs are spiraling out of control and have hit 18% of the GDP.
Parents have to pay more for their children's tuition which has risen to $15,500 yearly from $10,000 in 2000.
Student debt which is now the #1 source of debt can take years to pay off.
Unemployment has been above 8% for the last few years.
Before Social Security, many seniors lived with their children. Those without families or with families too poor to support them, relied on charity to live. For many, retirement came when they were physically no longer able to work. So for many, old age meant financial insecurity and loss of financial independence. If all welfare was cut to seniors, they would have to deal with tens of thousands of dollars in medical bills because of their bad health.
Social Security is beneficial to seniors because it gives financial security not just to middle-class but also to working class and poor Americans. Not only does it provide financial security during years of high medical bills but also financial independence.
It relieves many poor households of having to support their parents (keep in mind the medical bills) while saving for retirements of their own.
6: w w w.politifact.com/new-jersey/statements/2011/oct/09/steve-lonegan/conservative-activist-steve-lonegan-claims-social-/
First of all, let me cite the full text of Article 1, Section 8,
"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
To borrow money on the credit of the United States;
To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;
To establish Post Offices and Post Roads;
To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;
To constitute Tribunals inferior to the supreme Court;
To define and punish Piracies and Felonies committed on the high Seas, and Offenses against the Law of Nations;
To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;
To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;
To provide and maintain a Navy;
To make Rules for the Government and Regulation of the land and naval Forces;
To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;
To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;
To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings; And
To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof."
"By a simple reading of the constitution it is saying Congress can impose taxes to promote the general welfare of the US." Absolutely wrong! It says in the preamble that Congress has the power to tax for the common defense and general welfare, but what you ignore is that it specifically enumerates each power or area and defines clearly what promotes the common defense and general welfare (To). As you can see it never specifies retirement as an area for the federal government to be involved in rendering Social Security unconstitutional. With all due respect, there is nothing in this text that would suggest Congress has an unqualified, unlimited power especially on the basis of what you think "general welfare" ought to be. If you believe that retirement should be an area of concern and that we should be compelled into this program, then pass an amendment rather than trying to read into it your own predications.
Secondly, I felt that you gloss over Madison's explanation and move to dismiss it as just his version as opposed to the correct interpretation. Allow me to quote from Federalist 41,
"Some who have denied the necessity of the power of taxation [to the Federal government] have grounded a very fierce attack against the Constitution, on the language on which it is defined. It has been urged and echoed that the power to "lay and collect taxes, duties, imposts, and excises, to pay the debts, and provide for the common defense and general welfare of the United States" amounts to an unlimited commission to exercise every power which may be alleged to be necessary for the common defense or general welfare. No stronger proof could be given of the distress under which these writers labor for objections, than their stooping to such a misconstruction."
"For what purpose could the enumeration of particular powers be inserted, if these and all others were meant to be included in the preceding general power? Nothing is more natural or more common than first to use a general phrase, and then to explain and qualify by an enumeration of the particulars. But the idea of an enumeration of particulars which neither explain nor qualify the general meaning, and can have no other effect than to confound and mislead, is an absurdity ... what would have been thought of that assembly, if, attaching themselves to these general expressions and disregarding the specifications which limit their import, they had exercised an unlimited power of providing for the general welfare?"
As you can see above, Madison's reasoning was impeccable. As for Alexander Hamilton, he defended the limitations on the Federal Government in the Federalist Papers and didn't advocate his expansionist views until after the Constitution was safely ratified. After all, this was a man that believed Monarchy was the best form of government advocating among other views that we could have presidents elected for life, senators elected for life, and state governors appointed by the president. He also believed that the Sedition Act was justified by the general welfare clause. It seems evident that his views weren't espoused so boldly until after ratification and they belie the whole intent and purpose of the Convention.
Additionally, I therefore reject your contention that, "…the writers of the constitution did not care to be specific about what the general clause meant within the constitution itself." Quite the contrary as the text of the Constitution as well as Madison's view attest to this fact. Congress rejected this expansionist view and the presidential contest between Adams and Jefferson would suggest the nation by and large repudiated this "interpretation."
Lastly, I would point out that when the Supreme Court did take up the constitutionality of Social security, it labored under the threat by FDR and his court packing scheme, which led the Chief Justice to pressure Justice Roberts who would later write in 1951 that the court voted against the Constitution to save it. Furthermore, if something violates the Constitution I consider it legitimate grounds for opposing it and your proposal to amend would be the subject of another debate.
Rebuttal # 2 - Social Security: Insurance or Ponzi Scheme
Firstly, no one pays fees and all workers are taxed and the money is withheld from their paycheck. Social Security is not based on sound principles of insurance and your contention is completely false. As I explained, in the private sector your premiums are invested generating real wealth and this is then used to pay annuities. The difference is Social Security simply taxes you and transfers the wealth to current beneficiaries of the program on the unreliable promise that in the future workers will be taxed to pay you. I don't want to quibble about semantics, but it is not insurance in the traditional sense.
You also contended that, "…you can have access to an expensive service at reduced to no direct cost by paying annual fees every year and that is what Social Security is." You are taxed on every single paycheck you earn and to claim this at a reduced or no cost is simply confounding. While the program itself may be expensive, this doesn't follow that the service is expensive.
Secondly, the way you define a ponzi scheme is false. There is no criteria that establishes that it investors "will get 100% returns." What makes the scheme fraudulent is that it pays investors a return with their own money or with the money of new investors as opposed to paying them a return based on profit. This is analogous to how Social Security operates by using taxes (investments/fees?) to pay current beneficiaries (initial investors). The scheme fails because it generates no wealth or profit and relies solely on the addition of new investors (workers). I did make it a point to previously point out that in 1940, there was a 135% return and next to nothing, but this fact alone has no reflection on whether or not Social Security operates like an illegal ponzi scheme.
Thirdly, you raised the issue of a surplus so I will address this point as well. There is no trust fund where surplus money sits waiting for beneficiaries of the program. By law, this money is put into the general fund of the Treasury Department and spent on other programs leaving the Government with IOUs (Government investing in it's own debt). And since you hold up the politifact article, with which I am very familiar, I challenge you to present the three arguments they use and present me the opportunity to knock them down as well and also give me the opportunity to question the supposed infallibility and proliferation of "non-partisan fact-checkers." This might be left to another debate.
Lastly, I also reject your notion that Social security is not a ponzi scheme simply because by force of the law it may simply force us to surrender more in the form of taxes to address the problems or cut the already paltry benefits.
Rebuttal #3 - Compulsion
My issue was that the government has no legal authority or right to force me to pay for someone else's retirement on the tenuous promise that I too will have someone forced to pay for my retirement, especially when you acknowledge the reality that we have no property rights to our so-called benefits and Congress is free to raise the age, raise taxes, and cut benefits. This is legalized plunder and in all likelihood today's worker's should not expect even the meager benefits afford to today's beneficiaries, but most certainly will have to wait at an older age while paying more for less. For me, this is utterly immoral.
Let me begin with what you stated,
"The claim that social security is bankrupt was also reviewed by politifact. The issue here is that you are broke if you can't pay your bills, however Social Security is still being offered ."
First of all, I reject this argument entirely. As I pointed out previously, Social Security was running a deficit of about $50 billion in the fiscal year of 2010. When you expenditures exceed your revenue, this is what we refer to as bankruptcy. When your liabilities exceed assets or when you are unable to discharge liabilities. While it may be true that the government has a printing press and can rely on printing more money to finance deficit spending, the debt remains. It is on this basis that I say it is bankrupt. Saying it still offers the program doesn't negate the fact that it is broke.
Secondly, I have addressed the issue of the trust fund, which only exists in name only. You are simply talking about one branch of government giving another branch IOUs. These are not financial assets. Additionally, the government generates revenue through taxation, which means a higher level of taxation in the future. Perhaps I missed it, but I don't see how this is an argument for Social Security. I would like to extend an invitation to debate the issue of deficit spending, the federal reserve, and related issues.
Thirdly, I have pointed to address your last point that Social Security is already running deficits and those IOUs in ordered to be redeemed would require raising other taxes or inflating the money supply increasing our national debt. Yes, they can cut the benefits, which would already make an unjust, worthless "benefit" all the more worthless at an increased cost to me if I even live to see it especially if the age is raised as well.
Rebuttal #5 - Responsibility
I have made the point that there are very many was a person could secure their own retirement, even something as basic as saving and compound interest even though I would argue the Federal Reserve is robbing us of our savings through inflationary policies (for another debate). Based on that we could use the money better than the Government to accomplish this end.
Social Security doesn't make retirement affordable and incentives people to forgo their individual responsibility to plan and secure their own retirement and simply rely on the government to sustain them during those years. As for college tuition, I challenge you to debate this issue later on because I would contend there are numerous arguments against government involvement in this area because it is the very reason why tuition costs are spiraling out of control leaving students with a $100,000 mortgage and no house. It also has other harmful effects when people pursue what are essentially worthless liberal arts degrees rather than acquiring proficiency and skills that can be used to find employment. I don't want to delve into this because it is up for another debate. This goes for healthcare or food and energy costs as well.
As to you conclusions, I don't believe Social security is a benefit. It deprives people of their sovereignty and responsibility to rely on an insolvent program that operates on unsound principles and pays a return that render people totally dependent on it to poverty. Workers today can expect to wait till a longer ages, paying higher payroll taxes as well as higher rates for other taxes for even less. I move to end the program and let people have the dignity and autonomy to determine and pursue their own happiness.
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