Keynesian ideologue Paul Krugman is out with a piece in the New York Times praising Social Security as proof that the government is the solution to poverty in America. He wants us all to celebrate Social Security's 75th anniversary. He goes on to lament the fact that some Democrats and most Republicans are considering cutting benefits and/or raising the retirement age to 70. According to Krugman, Social Security is in a strong financial position and should not be changed because it would hurt the poor. Ever the elitist, Krugman takes it upon himself to set the record straight on Social Security stating:
Another problem I have with Krugman is his insistence on calling Social Security a benefit for the poor and disadvantaged. This Orwellian doublespeak has been very successful in confusing people about the truth regarding Social Security: IT IS A TAX NOT A BENEFIT according to the IRS. Furthermore, it is a coercive tax which, if you do not pay, will land you in prison deprived of your life and liberty. As George Washington said, "government is not reason, it is not eloquence, it is force." I find it hard to believe how this threat of government force can be called a "program that has brought dignity and decency to the lives of older Americans," according to Krugman. It is also disingenuous to say that it has brought dignity to older Americans since it keeps them in perpetual poverty and prevents them from amassing generational wealth. That's righ; if you work from age 21-65 and retire, but then die at 68, your children get $200 dollars as a death benefit. This is nothing short of a criminal confiscation of wealth by your own government. The worker contributes $200-300K over a lifetime, and the family gets $200. If workers had the right to invest their own money, they would be getting much more, assuming a 5% average annual return on the investment portfolio. So in essence the government is stealing from you and keeping you and your heirs perpetually poor. This is especially true for minorities who on average have a lower life expectancy.
Finally Krugman makes the ultimate error by stating that Social Security will never go broke. Apparently, he considers himself such a genius that he can see into the future and declare this as if it were a fact. Never mind the fact that Social Security's own actuarial analysis says that it will fall into deficit by 2037. After all, Krugman is Keynesian economist who "knows how the economy works." His theory is based on the premise that the government can inflate its way out the crisis. How can they do this? They can continually lie about the real inflation rate, which creates a real benefit for the government because Social Security payments are tied to the CPI. If real inflation is 5-7% (which it is according to Shadow Stats), the government will say it is only 0-1%, which reduces the real payments that the government has to pay to Social Security recipients. This scam helps push the problem farther into the future and delay the inevitable collapse of the system. It is unfortunate that people like Krugman make the decisions in this country. It is no surprise they have led the US economy to the edge of the abyss, and, when it all collapses, they will never take responsibility for their criminal actions.
Related article on why Social Security is a ponzi scheme click here
Black Swan Insights
About that math: Legally, Social Security has its own, dedicated funding, via the payroll tax (“FICA” on your pay statement). But it’s also part of the broader federal budget. This dual accounting means that there are two ways Social Security could face financial problems. First, that dedicated funding could prove inadequate, forcing the program either to cut benefits or to turn to Congress for aid. Second, Social Security costs could prove unsupportable for the federal budget as a whole.I am impressed with the arrogance of this economist who has been wrong time after time. Just for readers to remember, this simpleton called for the Fed to create a housing bubble in 2002 to "stimulate" the economy. What is particularly scary is that the ruling class in Washington and at the Fed listens to this bedlamite. Anyway, Krugman again makes numerous mistakes when he discusses the alleged solvency of Social Security. He asserts that because Social Security ran surpluses for 25 years, it has credit in a special account called the trust fund. This is not correct. While it is true that Social Security did run surpluses, the problem is that the government already has spent them. In return, Social Security was given nothing more than an accounting entry confirming the fact. The truth of the matter is that all Social Security has is paper IOUs from a bankrupt and heavily indebted federal government, which has been forced to print money to pay its bills. If the government was to make good on these IOUs they would have to either borrow more money, raise taxes, cut spending, or print money. Krugman would be correct if the government had not stolen the Social Security's surplus for the past 25 years and used it to fund normal government spending. But they have spent the surplus, and so the idea of a trust fund with hundreds of billions stashed a away for a rainy day is a lie. If Social Security is to be funded after it slips into perpetual deficit, it will come from directly from the government and not from people paying into Social Security.
But neither of these potential problems is a clear and present danger. Social Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund. The program won’t have to turn to Congress for help or cut benefits until or unless the trust fund is exhausted, which the program’s actuaries don’t expect to happen until 2037 — and there’s a significant chance, according to their estimates, that that day will never come.
Another problem I have with Krugman is his insistence on calling Social Security a benefit for the poor and disadvantaged. This Orwellian doublespeak has been very successful in confusing people about the truth regarding Social Security: IT IS A TAX NOT A BENEFIT according to the IRS. Furthermore, it is a coercive tax which, if you do not pay, will land you in prison deprived of your life and liberty. As George Washington said, "government is not reason, it is not eloquence, it is force." I find it hard to believe how this threat of government force can be called a "program that has brought dignity and decency to the lives of older Americans," according to Krugman. It is also disingenuous to say that it has brought dignity to older Americans since it keeps them in perpetual poverty and prevents them from amassing generational wealth. That's righ; if you work from age 21-65 and retire, but then die at 68, your children get $200 dollars as a death benefit. This is nothing short of a criminal confiscation of wealth by your own government. The worker contributes $200-300K over a lifetime, and the family gets $200. If workers had the right to invest their own money, they would be getting much more, assuming a 5% average annual return on the investment portfolio. So in essence the government is stealing from you and keeping you and your heirs perpetually poor. This is especially true for minorities who on average have a lower life expectancy.
Finally Krugman makes the ultimate error by stating that Social Security will never go broke. Apparently, he considers himself such a genius that he can see into the future and declare this as if it were a fact. Never mind the fact that Social Security's own actuarial analysis says that it will fall into deficit by 2037. After all, Krugman is Keynesian economist who "knows how the economy works." His theory is based on the premise that the government can inflate its way out the crisis. How can they do this? They can continually lie about the real inflation rate, which creates a real benefit for the government because Social Security payments are tied to the CPI. If real inflation is 5-7% (which it is according to Shadow Stats), the government will say it is only 0-1%, which reduces the real payments that the government has to pay to Social Security recipients. This scam helps push the problem farther into the future and delay the inevitable collapse of the system. It is unfortunate that people like Krugman make the decisions in this country. It is no surprise they have led the US economy to the edge of the abyss, and, when it all collapses, they will never take responsibility for their criminal actions.
Related article on why Social Security is a ponzi scheme click here
Black Swan Insights
Social security is a good program.
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