Social Security Is a Welfare, Not a Pension, Plan

I'm going to be 64 this week, so I've been thinking about Social Security, a program I've actively opposed since the 1970s but one in which I have been compelled to participate.

Social Security is a welfare and not an insurance plan.  Its advocates claim that it is both, but that is impossible. Insurance is actuarially fair: It spreads the risk of loss fairly across a population. In contrast, welfare plans are redistributive: They compel some to give up wealth to subsidize others.

There are legitimate reasons to support welfare and charity, and there are legitimate reasons to reject political lying. In order to convince Americans to accept Social Security, the Democrats pretended that it is a fair insurance plan. To do so, they created a deception that the taxes into Social Security, FICA, are insurance premiums even though there is no legal connection between FICA and Social Security benefits.

They also created a deception that there is a Social Security fund that is equivalent to a pension fund and that FICA taxes build someone's fund, which is returned in retirement. There is a fund, but it is more in the nature of a cash box than a pension fund. Social Security has always been primarily a pay-as-you-go system. A relatively large excess accumulated because of the temporary Boomer population bubble, but that would have dissipated had the politicians not (legally) looted the fund.

Democratic Party politicians gave voters the impression that FICA is a contribution to an insurance plan and not a regressive income tax.  Many voters also believe that their Social Security benefits equate to their contributions.

Social Security benefits do not equate to contributions. The use of wage bands allocates higher benefits per dollar to lower-wage participants. Disability benefits are more heavily distributed to actuarially identifiable groups, but there is no charge to those groups.

Anyone who does not benefit from salary bands or disability benefits is unlikely to participate in Social Security. Hence, the Democrats had to make the plan authoritarian and compulsory. The authoritarianism and compulsion seal Social Security's status as a welfare rather than an insurance plan.

Insurance is an economically fair method of managing risk, and risk-averse consumers need no compulsion to purchase it. Social security is not economically fair; it is equivalent to any other form of welfare. Hence, there is limited economic motivation, save altruism, for net contributors to participate.

My Interview on Redeemer Broadcasting

Dan Elmendorf of Olivebridge, NY interviewed me on his Redeemer Broadcasting radio chain, which has seven stations in upstate New York, New Jersey, and Maryland.  The interview will air on May 27, and it is linked here. The stations include WFSO, WNEQ, WYNE, and WXMD. The interview concerns the link between university scientism and political intolerance.

Speak Freely

George Leef of the James Martin Center has an excellent review of Princeton University's Keith Whittingon's new book Speak Freely. The analogy between the treatment of liberal, Jewish law professor Ernst Cohn by Nazi students at the University of Breslau in 1933 and the treatment of conservative faculty at elite American universities in 2018 is apt.

Phages: One More Example of Misguided FDC Regulation

Mother Jones has an article about phage treatments for bacteriological infections. Phage treatments predated antibiotics, but the advent of antibiotics eliminated research interest in them. They are based on a discovery of French researcher  Félix d’Herelle, who had worked at Yale but was induced to move to Russia because  Stalin provided funding. Stalin murdered D'Herelle's chief protege,  Georgi Eliava, in a purge. However, the Eliava Institute still exists.

The phage treatment may present a way to treat the new, antibiotic-resistant bacteria that are beginning to infect Americans.  However, they are unavailable in the US because the FDA will not allow them, despite any evidence of their being harmful.

This is one more example of murderous effects of government regulation.  Maryn McKenna writes in Mother Jones: 


But for phage therapy to be deployed routinely in the United States, phages would have to be approved as drugs by the FDA. To treat an American patient with them now requires emergency compassionate-use authorization—effectively an acknowledgment that nothing with an FDA license can save the patient’s life. And Strathdee [an American who required treatment] was about to learn that because phages have no such approval, awareness of them is scarce and unevenly distributed, and finding the right researchers and physicians requires extraordinary luck.