Social Security Is an Entitlement

Entitlement has come to mean the right to guaranteed benefits under a government program. In the nature of government programs, those who receive the benefits usually don’t pay the taxes required to fund those benefits.

I recently saw on Facebook (which I look at occasionally) a discussion to the effect that Social Security isn’t an entitlement program because “we (the discussants) paid into it”.

Well, paying into Social Security doesn’t mean that you paid your own way. First, the system is rigged so the persons in lower income brackets receive benefits that are disproportionately high relative to the payments that they (and their employers) made during their working years.

Second, the money that a person pays into Social Security doesn’t earn anything. You are not buying a financial instrument that funds productive investments, which in turn reward you with a future stream of income.

True, there’s the mythical Social Security Trust Fund, which has been paying out benefits that have been defrayed in part by interest earned on “investments” in U.S. Treasury securities. Where does that interest come from? Not from the beneficiaries of Social Security. It comes from taxpayers who are, at the same time, also making payments into Social Security in exchange for the “promise” of future Social Security benefits. (I say “promise” because there is no binding contract for Social Security benefits; you get what Congress provides by law.)

So, yes, Social Security is an entitlement program. Paying into it doesn’t mean that the payer earns what he eventually receives from it. Quite the contrary. Most participants are feeding from the public trough.