Franklin Roosevelt: A Monstrous Liar
In a recent debate, when Governor Rick Perry described Social Security as “A Monstrous Lie,” he was right on a deeper level than he intended. Social Security’s financial difficulties are the logical consequence of its corrupt foundation. Social Security is a welfare transfer, not insurance, and Franklin Roosevelt lied when he said otherwise. Franklin Roosevelt also knew that government clients are reliable Democrats, so he deliberately designed Social Security to turn seniors into a dependent underclass. In order to solve this problem, it must first be properly defined, because different definitions lead to radically different solutions. Today, well-intentioned reformers, led by Congressman Paul Ryan, are boxing themselves in. Americans should not restructure Social Security until we justify its continued existence. Given Social Security’s morally bankrupt foundation, this is impossible. Americans should therefore dismantle Social Security, not save it.
In a January 1935 address, Franklin Roosevelt called on Congress to create “compulsory contributory annuities which in time will establish a self-sufficient system for those now young and for future generations.” When Franklin Roosevelt said that, he was consciously lying. Social Security has never been a “contributory annuity” to which an investor could stake a legal claim; the Supreme Court confirmed this in the 1960 case Nestor v. Fleming. Social Security has always been a welfare transfer from productive citizens to government clients. Franklin Roosevelt knew he was lying. Shortly before his January 1935 speech, Franklin Roosevelt confided to Labor Secretary Frances Perkins that Social Security was “the same old dole under another name. It [was] almost dishonest to build up an accumulated deficit for the Congress of the United States to meet in 1980.” Social Security first went bankrupt in 1983.
Franklin Roosevelt’s web of lies was never sustainable. Transfer payments are always welfare; they forcibly confiscate the property of one citizen and redistribute it to the politically favored. In so doing, they inevitably become vote-buying operations. Transfer payments create a structural imbalance where government clients vote into office politicians who ratchet up benefits while productive citizens are too busy to stop them. This misalignment of incentives is why Social Security’s financing so closely resembles a Ponzi scheme; eventually the Golden Goose always dies. Making matters worse, payroll taxes raise the cost of employing citizens by creating an artificial “wedge” between an employee’s take home pay and that employee’s cost to his employer. Social Security is worse than a Ponzi scheme; while the financing is identical and both destroy jobs, no one went to prison for refusing to participate in Bernie Madoff’s far less monstrous lie.
Focusing on the foundational corruption of Social Security, instead of myopically obsessing over financing, leads to radically different conclusions about what problem needs to be solved. Many similarities exist between the collapse of America's welfare state and the collapse of Soviet Communism; the differences are of degree, not kind. In this emerging debate, Wisconsin Congressman Paul Ryan, like former Soviet Premier Mikhail Gorbachev, wants to preserve a corrupt system that deserves to die. Like Gorbachev, Congressman Ryan also wants to add trillions of new debt doing it. Post-Wall Street Bailout America can no longer afford to mask progressivism's economic symptoms; we need to address the core philosophical pathology. Congressman Ryan’s glasnost approach does more to subsidize Wall St than promote freedom; instead of a heavily regulated personal account, Americans should have the option to free ourselves from the Social Security system. The overwhelming majority of Americans under 30, and a substantial number of older citizens, will gladly renounce Social Security benefits in exchange for freedom from payroll tax tyranny.
Before discussing solutions to Social Security, Americans must properly define the problem. Social Security is built on a foundation of lies; it masks welfare and vote-buying in the illusion of insurance. President Obama’s callous attitude towards Social Security benefits during the debt ceiling debate demonstrates the tenuous, politically driven, nature of the corrupt status quo. Social Security's financial bankruptcy is a symptom of its moral bankruptcy; why should productive citizens subsidize government clients?!? Dependence transforms citizens into subjects; in a free society prosperous citizens will care for themselves. Social Security should be dismantled, not saved. Until Americans understand and acknowledge that the monstrous lie behind Americas collapsing welfare state extends far deeper than its financing, we cannot make Washington D.C. truly inconsequential in our lives.
The Author is a 30 year old Tea Party Activist in Austin, TX; he voted for Governor Perry twice last year