Social Security and Half-Truths

The natural reaction to anyone basing a sale on an outright lie is to dismiss them and not make the purchase. That's why the best salesmen selling a defective product rely on half-truths.

They make representations that allow the listener to draw parallels and to convince themselves of the value of a product without the salesman having to face repercussions when the product ultimately fails to perform properly.

One such half-truth is contained in the current debate over what to do with Social Security. The statement that's been made to convince the general public is that federal employees have a privatized program therefore, one should be made available to the general public.

That statement exploits the disdain the public has been fed for federal employees by the "anti-big government" crowd and also strikes at the concept of fundamental fairness.

The only problem is that the two examples, the federal employees plan and the plan to privatize Social Security, are as different as apples and oranges held together only by the commonality that they are a fruit- hence the half-truth.

The federal employees have a program under the Federal Employees Retirement System (FERS) that simply allows them to participate in the Thrift Savings Plan (TSP) which is on top of Social Security and is much like a 401(k) that an individual can open. Nothing is taken from the social security part of the federal employees contributions.

The Thrift Savings Plan is funded through any extra savings the employees have at the end of the contribution cycle.

Furthermore, if one sets aside that false argument, extending a plan like the Thrift Savings Plan to Social Security is fraught with problems as pointed out by Francis X. Cavanaugh who served as the first executive director of the TSP from 1986 to 1994.

Finally, the privatization of Social Security is nothing more than the continuation of a policy of fundamental unfairness towards the working poor. There are many minor adjustments that could be made to ensure Social Security's soundness (e.g. ending the withdrawl of benefits for the wealthy and/or lifting the prohibition of collecting social security contributions after they pass a certain amount of income).

There is truth to the fact that Social Security does face some danger. A truthful analysis would show that the danger is not with the system but rather the unsustainable debt incurred as a result of the Administration's fiscal policies.


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