Time to Opt Out of the Social Security Ponzi Scheme

The Social Security Ponzi scheme is perhaps the most consequential government infringement upon our lives.  Conservatives are justifiably outraged that Obama egregiously mandated that we purchase health insurance.  However, the individual mandate is not nearly as meddlesome and tyrannical as the government’s complete control over our retirement security.  The only reason why these two programs are regarded differently by the public, is because Social Security has been around for 75 years.  Consequently, most Americans are conditioned to believe that a person’s retirement is indissolubly tied to government-run Social Security.


Now that Social Security is running a perennial deficit and is facing insolvency, conservatives have an opportunity to reverse one of the most flagrant violations of our property rights, by offering workers the option to opt out of the Madoff-style program.

As the unfunded liability for Social Security balloons to $21.4 trillion over the next 20 years, it is painfully obvious to young workers that they will not enjoy much retirement security, if any, from the government program.  Democrats are totally apathetic to their grim future; they will be long retired by then, enjoying the full array of government benefits that they secured for themselves.  Meanwhile, they would rather demagogue the issue, using fallacious scare tactics to stir up current retirees.  Accordingly, we should harness the Democrats’ Mediscare demagoguery towards seniors, and direct it towards younger Americans.  If Paul Ryan’s Medicare plan will push granny over the hill, the status quo of the Democrats’ Ponzi scheme will prevent the grandchild from making it up the hill.

It is clear that even after contributing over 12% of their income to SS (including the employers’ share), younger workers will not receive enough money for retirement.  Even if they receive those benefits and if the current system prevails, the government will continue to violate our property rights by preventing SS contributions from unconditionally being passed onto the families of those who die before retirement.  Moreover, the government will continue to tax the “benefits” of retirees who earn income, interest, and dividends with a graduated scale (yes, Social Security already is means tested).  It’s time to opt out of the current system.


Despite the fact that Democrats created these unconstitutional entitlement programs and plundered their funding sources, condemning them to an insolvent future, Republicans are working assiduously to reform them.  However, every reform plan – from partial privatization to raising the retirement age – is met with obdurate opposition and insidious demagoguery about impoverishing seniors.  Well, if they desire to obstruct our sincere efforts to perfect their own unconstitutional programs, it is time for us to offer younger workers the option to opt out of these programs altogether.

We should start with Social Security.  According to a new Gallup poll, a lack of retirement funds is Americans’ most pressing financial concern.  The survey also found that Americans aged 30-49 are the most apprehensive about their retirement.  Additionally, they found that Americans who have yet to retire are already relying heavily on their personal retirement accounts, such as 401(k)s and IRAs.  The Democrats created this problem; they exacerbated the problem; and most non-retirees have identified the problem.  This is a quintessential opportunity to pin the tail on the donkey and communicate to current workers that the Democrats will never allow them to retire, while Republicans will empower them to control their own future.


With high unemployment and polls showing a precipitous drop in support for Obama among young voters, now is the time to reach out to those voters.  Congressman Pete Sessions is proposing the SAFE ACT (HR 2109), which would allow younger workers to control all of their retirement savings.  Here are some of the key details of the proposal:

  • Every American would be able to opt out of the current system and direct the full 6.2% of payroll taxes to a personal retirement account beginning January 1, 2012.  Conversely, anyone who wishes to remain in the current system would not be affected.  An employee who chooses to opt for the SAFE account can switch back to the current system during the first five years after opting out.
  • After 15 years of the bill’s enactment, employers would be able to contribute “their share” of payroll taxes to the employee’s SAFE account.
  • Self-employed individuals would be able to divert the full amount of their payroll taxes to a SAFE account.
  • The SAFE accounts would be tax free and any cash contributions would be tax deductible.   Also, all post-retirement distributions from the account would be tax free.  Any pre-retirement distributions would be taxed as income.
  • Upon the death of the account beneficiary, irrespective of his/her age, the inheritors of the estate will be able to assume full ownership of the account.

Reps. Blackburn , Burton, Neugebauer, Smith, Terry, and Hensarling are co-sponsoring the bill.

Undoubtedly, there are many fine details of such a plan that would need to be debated and tweaked.  Nonetheless, we must begin acclimating people to the novel idea of controlling one’s own destiny; otherwise we will all be destined to bankruptcy. It’s high time to banish the government from their stranglehold on our retirement.  We applaud Herman Cain for having the gumption to propose a private investment plan during the presidential debate on Monday.  He cited the enormously successful private retirement plan put into place in Chile in 1981.  According to Investor’s Business Daily, every Chilean can expect a “9.23% average compound rate of return on their investment over 30 years compared with the 1% or less that U.S. workers can expect.”

Aside for the obvious detriments of government control over our most cherished years, their indolence and inefficiency has wasted so much of our contributions.  A new report from the Social Security Inspector General shows that the Social Security Administration made $8 billion in improper payments during 2009.  A large percentage of the waste and fraud came from the most indefensible and unconstitutional part; Supplemental Security Income (SSI).


So, young Obama zombies with skulls full of mush; with whom do you trust your retirement security: your bank account or Obama’s defunct ATM?  How about Bernie Madoff?


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