The real reason Social Security is in trouble

Susan Reimer's recent column on Social Security Dilemma completely missed the mark ("Don't blame boomers for Social Security dilemma," April 22). Neither Baby Boomers nor the lack of new workers has anything to do with the current Social Security dilemma.

The problem lies with Congress and the politicians in Washington.

Social Security was originally set up in the 1930s as a "pay as you go" retirement system. Money was collected from workers and supposedly invested and saved for their retirement.

Consider the fact that, today, nearly 15 percent of every worker's salary is paid into the social Security system. The workers contribute over 7 percent, and their employers pick up the rest. In the case of the self-employed, the entire 15 percent is collected by the IRS.

Originally, this money was intended to be invested in that worker's name, with the interest on it compounded over the 40-plus years of the worker's career. That would have been ample money to support the Social Security system.

But over the years, Congress and the politicians in Washington simply could not keep themselves from raiding this fund. They "borrowed" the money for their own use — and, of course, never paid it back.

In effect, the money was stolen from each and every worker who contributed to Social Security. Stolen may seem like a harsh word, but what else do you call it when someone "borrows" something without the owner's permission and never returns it?

This effectively turned the Social Security system into a Ponzi scheme, defined as collecting money from investors with the promise of paying it back, then diverting the money to other uses and depending on new investors to pay back the older ones when they are ready to collect.

This is exactly how Social Security works. Even Charles Ponzi, the originator of the scheme, would be jealous of the federal government's power to make participation the program mandatory — and to take money out of the worker's paycheck before they ever even see it.

If the trustees of any privately run retirement plan "borrowed" and then spent the original investors' money while relying on new investors to pay them when they retired they would be put in jail. But the politicians in Washington just consider it business as usual.

This is the reason that we have the "Social Security dilemma" Ms. Reimer describes. It has nothing to do with Baby Boomers, birth rate demographics or the fact that more retirees are being supported by fewer workers.

Iver Mindel, Cockeysville

Copyright © 2018, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad