Social Security: The Big Lie

by Will Wilkinson on February 5, 2005

I wish everyone would read Paul Romer’s “Preferences, Promise, and the Politics of Entitlement,” in Individual and Social Responsibility, edited by Victor Fuchs.

Romer tells the story of exactly how concerted and intentional is the deceptive rhetoric of Social Security. The ideas of SS as “insurance,” the payroll tax as “contributions,” and the “trust fund” were purposeful rhetorical ruses deployed to lock in political support for the program. The point was to create the illusion that a tax plus a regressive transfer from the young to the old (which could not have maintained political support) is instead a form of social insurance, which it manifestly is not. The illusion — the lie — has succeeded brilliant. Indeed, Romer’s paper suggests that Social Security may be the best example of purposefully deceptive framing for political gain in the history of the United States. (That’s the lesson I take from it, in any case.)

Unfortunately the paper is not exactly online, but you can probably make your way through it using the Amazon “Search Inside” function (link above).

  • Since an American citizen living abroad can still collect Social Security upon retirement, I see no reason why the same wouldn't be true for someone living on the moon. Next excuse, monkeyboy?
  • Paul Zrimsek
    Now that we're all agreed that a big benefit cut in year Y is no big deal provided real benefits are higher than they were in year Y-37, I propose that we immediately cut payments to retirees to 1% above their 1968 level. We could use the money to help save Medicare.
  • monkyboy
    As I assume you and your merry band of anachro-whatevers will be on the first flight to the moon when they begin, I have to say, not much Micha :)
  • Hey monkey boy, howsa bout we make a deal and I sell you all future claims I might have to my Social Security benefits, since you seem to be so certain that they are coming. How much would you offer me for them?
  • monkyboy
    Yes, Micha, benefits will have to be cut in 2042, or 2052, depending on whose numbers you believe.

    But the way SS benefits are currently indexed, even your cut benefits will be higher, in constant dollars, than what current SS recipients get now.

    Keep hanging your stockings by the fireplace at Christmas :)
  • Micha Ghertner
    "People my age are as likely to believe in Social Security as they are in Santa Claus. And, if you ask me, it would be equally naive for a twenty-something to believe in either one.

    ...I will be 62 in 2042, the exact year the Social Security Administration forecasts that the system's trust fund will run out of money, and benefits will be cut to match cash flow from tax payments, unless a fix is made earlier."

    - Washington Post
  • monkyboy
    Glen, even if nothing is done to Social Security, today's children will receive larger monthy payment, in today's dollars, than those workers who are retiring in the next few years...

    Why fix it if it ain't broke?
  • Yawn....
  • Gareth
    A promise is a lie if it isn't fulfilled. It isn't a lie if it is.

    The irony here is that the people who propose not fulfilling the promise justify it by saying that the promise was always a lie.
  • Timothy
    Glen- Surely you can admit that the President specifically said that those over 55 will not have their benefits cut. Even the President apparently is not proposing that younger people stop paying for the retirement of the disportionately large Baby Boom generation.
  • Those actually sound like some darn good recommendations for communicating with regular people. And notice that they don't advocate lying -- on the contrary, they advocate acknowledging risks.

    And Monkyboy, we all know you disagree with Will's position on Social Security (and a lot of other stuff). But surely you can admit that if anyone will get screwed by reforming Social Security, it's probably not the children -- they're the ones getting screwed *right now*, because they're paying (or will be paying) large amounts of taxes to pay for the retirement of the disproportionately large Baby Boom generation. So if you're going to bag on SS reform, at least get your winners and losers straight.
  • Peter
    Sorry, I can't seem go get to it. Zero points.
  • monkyboy
    Speaking of deceptive rhetoric, here are the talking points from a playbook handed out at a recent Republican gathering to plan their Social Security phaseout strategy:

    Key Recommendations:

    "Personalization" not "privatization": Personalization suggests increased personal
    ownership and control. Privatization connotes the total corporate takeover of Social Security; this is inaccurate and thoroughly turns off listeners, who are very concerned about corporate wrongdoing.

    Talk in simple language: Your audience doesn’t understand financial jargon. Phrases such
    as "cash flow deficits" and "actuarial imbalance" don’t normally crop up in conversation;
    avoid using them.

    Keep the numbers small: Your audience doesn’t know how trillions and billions differ.
    They know these numbers are large, but not how large nor how many billions make a trillion.
    Boil numbers down to "your family’s share." Also avoid percentages; your audience will try
    to calculate them in their head, no easy task while listening to a speech, and many will do
    it incorrectly.

    Acknowledge risks: Many of your listeners will not have a lot of financial education or
    investment experience, but they know that markets have risk and nothing is guaranteed.
    They believe investments can grow over time, but they also know they can lose their
    investments. They don’t trust someone who tells them differently.

    Say it the way they can hear it: Your audience will reject some turns of phrase because of
    the connotations and associations. The responses are not universal, but they are much less
    personal than you might imagine.

    In other words, tell the morons, in simple language, why it's in their interest to screw their children...
  • Will, I think you've hit the nail on the head. I propose reforming SS to actually be a social insurance program here.
    I'd be interested to hear your reaction.
  • The drug war seems to have a life of its own. The successful framing of Social Security, on the other hand, can be directly attributed to a few extremely skillful politicians and bureaucrats.
  • titus
    "Romer's paper suggests that Social Security may be the best example of purposefully deceptive framing for political gain in the history of the United States."

    I don't know - I think I'd still have to go with the Drug War for that prize.
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