A few readers push back against the others. One writes:
We hear sometimes about how Social Security is self-sufficient; that's how those benefits Jilani is talking about are "guaranteed". Progressives like Nancy Pelosi and Barney Frank parrot the line all the time, as do the people trying to protect working-class folks from fear-mongering and (in Josh Marshall's words) bamboozlement. Part of the premise of that, of course, is that we have a crapload of money already paid into the system. You remember Al Gore and his lockbox, don't you, the "social security trust fund?" that makes the program totally, in no way a Ponzi scheme? Yeah, about that …
Something that went under the radar during the debt ceiling negotiations was Obama (and Timothy Geithner) telling people that, if we default, the government will have to stop issuing Social Security checks.
When? After all, we have $2.6 trillion in that trust fund thing, right? So the SSA can just mail out checks for years. Well, no. According to Geihner and Obama, those checks would stop coming … August 2nd. As in, the moment we default. As in, that trust fund has an approximate value of … what's the word I'm looking for? … oh yeah – Nothing.
So, how long do we get the benefits we've already paid for, if the program ceases to bring in later entrants? Well, we don't. So I don't think "guaranteed benefits" means what Jilani thinks it means.
The other:
Social Security is not guaranteed. Sorry to have to demolish a liberal shibboleth. Over 50 years ago, the U.S. Supreme Court ruled that workers have no legally binding contractual rights to their Social Security benefits, and that those benefits can be cut or even eliminated at any time, regardless of how much the worker has paid in to the system. See Flemming v. Nestor, 363 U.S. 603 (1960).
How can that possibly be, you may ask, if we've been paying into the system our whole working lives? In truth, Social Security contributions are not insurance premiums. They are simply taxes, like any other taxes, and the benefits are just a form of appropriated spending, no different than farm price supports, for example, that can be eliminated at any time. In other words, if Congress decides to abolish Social Security tomorrow, workers have no legal recourse whatsoever. As the Supreme Court explained in Fleming:
To engraft upon the Social Security system a concept of 'accrued property rights' would deprive it of the flexibility and boldness in adjustment to ever-changing conditions which it demands. . . . It was doubtless out of an awareness of the need for such flexibility that Congress included in the original [Social Security] Act, and has since retained, a clause expressly reserving to it '[t]he right to alter, amend, or repeal any provision' of the Act. 1104, 49 Stat. 648, 42 U.S.C. 1304. That provision makes express what is implicit in the institutional needs of the program."
I dare say that a private insurance company that sold a retirement product while nurturing the belief that customer benefits were guaranteed, when in fact they were not, would be guilty of fraud. Why does it cease to be fraud when the government is doing it?
The Dish 