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Social security crosses another rubicon

Posted: August 6, 2012 at 8:00 am   /   by

As if to put a period on the sentence formed by the previous post . . .

We find out that people are paying more into Social Security today that they will get out:

People retiring today are part of the first generation of workers who have paid more in Social Security taxes during their careers than they will receive in benefits after they retire. It’s a historic shift that will only get worse for future retirees, according to an analysis by The Associated Press.

Previous generations got a much better bargain, mainly because payroll taxes were very low when Social Security was enacted in the 1930s and remained so for decades.

“For the early generations, it was an incredibly good deal,” said Andrew Biggs, a former deputy Social Security commissioner who is now a scholar at the American Enterprise Institute. “The government gave you free money and getting free money is popular.”

Biggs is, of course, being facetious when using the terms “good deal” and “free money.” Anyone who works at AEI will tell you that nothing is free, certainly not Social Security, and that even back when Social Security was a “good deal,” it was still actuarially doomed, just as it is today. We’re just a lot closer to the doom now than we were 65 years ago.

People paying in more than they will get out is just one of the 12 Signs of the Entitlement Apocalypse.  And there was a great shuddering in the economy, and my wallet became empty as a cloth sack . . .