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Ida May Fuller, the first recipient

Ida May Fuller, the first recipient (Photo credit: Wikipedia)

{Published in the Colorado Springs Gazette, December 13, 2012}

“Stop cuts to Social Security!” So says my inbox, courtesy of AARP Colorado. I’m an AARP member, but after reading the message from start to finish, I can draw only one conclusion. AARP stands for the Association of American Reactionary Paranoids.

What exactly is it that has AARP in such a tizzy? Congress is re-examining how the Social Security benefit cost of living adjustment (COLA) is calculated. In other words, facing a multitrillion dollar deficit and a financial crisis of unheralded proportions, AARP is angry that Congress might scale back an automatic spending increase. Apparently, even rearranging the deck chairs on the Titanic is too much. When the ship is unsinkable, change is unthinkable.

Social Security as it is structured is not sustainable. Period. Its current unfunded liabilities are over $20 trillion. In just a few years, the system will begin to pay out more in benefits than it receives in taxes. Its very nature as a pay-as-you-go system, combined with the usual Washington accounting fictions, is a recipe for disaster.

The “fiscal cliff” that everyone is so hyped up about is nothing compared to the problems of the Entitlement State.

People believe that Social Security is an “earned” benefit that you make “contributions” that are “invested” towards your retirement. Not so. “Earnings” are simply the taxes you and your employer had to pay, it’s not like you had any choice in the matter. Nor were they invested in anything. They were simply sent right back out again to fund current retirees (after skimming off the top for expenses, of course).

In fact, the Supreme Court has ruled that recipients have no legally binding right to Social Security benefits, and that Social Security is not a contributory insurance program. Congress giveth, Congress can taketh away. That’s why AARP pays so much attention to them.

The Social Security “trust fund” is also a complete fiction. The “trust fund” is simply government bonds, IOUs taxpayers will have to pay. It contains no real assets. But don’t take my word for it. “Trust fund balances do not consist of real economic assets that can be drawn down in the future to fund benefits”. Darn it, where did I see that? One of those radical right-wing think tanks funded by the Koch brothers? No, now I remember. It’s in a budget report from the Clinton administration.

Social Security is a particularly raw deal for the young. Simple demographics mean there are not enough of them to support an increasingly older population. They would do far better if they were given the opportunity to invest their Social Security “contributions” in investment vehicles of their own choosing, empowering them to take greater responsibility for their future. For groups like the AARP, this is tantamount to heresy.

AARP Colorado’s email argues that benefits should not be cut because their recipients will get less money. Hello? Isn’t that what a spending cut does? By that logic, no entitlement program can ever be cut.

We have a decade, maybe two, to fix our entitlement problem. Otherwise, according to both the Bank for International Settlements and the Organization for Economic Cooperation and Development, we will face a financial meltdown worse than Italy, Spain or even Greece. Tough choices and real sacrifices need to be made. They need to be made now, while we still have time to bear them.

But the AARP cannot even tolerate the idea of reducing the rate of growth for a program that is unsustainable, unworkable, and unfair. This isn’t mere politics. It is head-in-the-sand ignorance, delusional, and ultimately immoral.

I know many of my readers are, like me, AARP members with young adult children. I urge you to write AARP, write Congress, and tell them you support real entitlement reform, even if it means cutting your expected benefits.

We can pay now, or our children can pay later.