Liberty & Power: Group Blog
Jonathan J. Bean
This post was prompted by all-too-common opinions expressed in Randall Holcombe's recent "Federal Government Debt Undermines the Programs It Finances" blog. The respondents passionately insist that Social Security is a contract, whatever you do to the budget, do not touch Social Security. "I paid in and it is a contract. They owe me."
The Supreme Court settled this issue in 1960! Even more to the point, the Social Security Administration mocks those who think it is a binding contract. On the SSA's own web site, it states:
"There has been a temptation throughout the program's history for some people to suppose that their FICA payroll taxes entitle them to a benefit in a legal, contractual sense."
The SSA cites the Flemming v. Nestor (1960) decision and even posts it in its entirety. The Social Security Administration defends the inevitable default on payments (for some Americans, not all) by summing up that case:
"In its ruling, the Court rejected this argument and established the principle that entitlement to Social Security benefits is not contractual right."
I don't agree with R. Holcombe that the program is "doomed." The program will be means-tested (prediction) for "those who do not need it," including those who saved, had long work histories, and generally did all the old-school things that our destroy-the-wealth State frowns upon. In fact, if Social Security were a binding contract, what is the stated rate of return? There is none! But anyone who has studied the history of Social Security knows that past and present formulas give a much higher payout to those with lower incomes and spotty work records. If you pay in the maximum amount your entire career, then you will get the lowest rate of return. This is all done behind the curtain of Oz.
One last Reality Check: You aren't entitled to Social Security at age 65. Starting October 1, 2027 (the day before I turn 65), the retirement age rises to 67. It will go even higher for "those who do not need (much) of it."
Mark my words. The slicing of Social Security will retain the benefits for the less productive wage earners and simply skew the formula ever more against those who work and pay the maximum amount.
Postscript: The person who appealed to the Supreme Court for his right to benefits was a Communist. Further proof that if those you dislike lose their rights, we all lose. There is a certain irony, though, with a Communist claiming a contractual property right to Social Security. History is funny that way.
And remember: we aren't talking about the Super Rich or even the 1%. If you are working upper middle class, you pay on wages (not investment income) up to $110,000. But don't expect much if anything in return. You are not entitled. The Court has spoken.
My latest op-ed explores the case of Aaron Swartz, the programming prodigy and Internet freedom activist who faced 35 years in prison before taking his own life this month.
For more than two centuries the subject of opium has been one of great controversy. Both its use and the legal restrictions against its use have been the cause of much human suffering. The Drug War Chronicle has posted a review of the recent works on the topic. They look at Opium: Reality's Dark Dream, by Thomas Dormandy, Opium Fiend: A 21st Century Slave to a 19th Century Addiction, by Steven Martin, and Social Poison: The Culture and Politics of Opiate Control in Britain and France, 1821-1926, by Howard Padwa. These book are in the tradition of Arnold Trebach’s The Heroin Solution one of the first works to point out that by demonizing the opium plant we were doing much harm to our society by sacrificing in many cases a most useful and effective remedy for the world’s pain and in fact adding much to it. Dormandy argues “Criminalization is justified if it deters potential delinquents and protects the innocent," but he writes. "Little if any evidence suggests that current legislation does either.”
The drug policies pursued and bragged about by both Democrats and Republicans are extremely costly. This is terms of wasted tax money for very little return. Also the price includes an ever growing disrespect for the nation's laws and leadership. Not to mention the generating of a great of unnecessary human misery. But lastly there is the tally of many of our fellow citizens killed for no good reason.