18 March 2011

The Myth of Social Security

One of the more common reasons that many give for reforming Social Security instead of abolishing this blatantly unconstitutional parasitic redistributionist Ponzi scheme is that people who paid into the program “deserve” to be paid back.  In essence, those who paid in are owed a payout.  Unfortunately, this is a myth perpetuated by politicians and believed by gullible idiots.

The reason why I say those who believe that citizens deserve payouts are idiots is due to one very simple Supreme Court case:  Flemming v. Nestor.  This is a landmark case where Social Security is concerned, and every citizen needs to know the ruling and understand its implications.

The background the case is very simple.  A man named Nestor was deported from the United States in 1956 for being a communist.  He had been eligible for Social Security payments since 1955, and wished to continue receiving said payments.  His basic argument was that because he paid into the system, per the terms set forth by Section 1104 of the 1935 Social Security Act, he deserved his payment. 

Specifically, he argued that his payments were a right protected under the Fifth Amendment, which says:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation. [Emphasis added.]

Nestor’s argument was that the government was required to pay him his Social Security benefits.  If they refused to, they were essentially taking away what was owed him, and therefore owed him in-kind compensation.  Note that Nestor’s argument is contingent on Social Security being treated as a debt obligation, which would essentially make it an asset comparable to an annuity.

The Supreme Court decided this case in 1960, and ruled that:
2. A PERSON COVERED BY THE SOCIAL SECURITY ACT HAS NOT SUCH A RIGHT IN OLD-AGE BENEFIT PAYMENTS AS WOULD MAKE EVERY DEFEASANCE OF "ACCRUED" INTERESTS VIOLATIVE OF THE DUE PROCESS CLAUSE OF THE FIFTH AMENDMENT. PP. 608-611.
(A) THE NONCONTRACTUAL INTEREST OF AN EMPLOYEE COVERED BY THE ACT CANNOT BE SOUNDLY ANALOGIZED TO THAT OF THE HOLDER OF AN ANNUITY, WHOSE RIGHTS TO BENEFITS ARE BASED ON HIS CONTRACTUAL PREMIUM PAYMENTS. PP. 608-610.
(B) TO ENGRAFT UPON THE SOCIAL SECURITY SYSTEM A CONCEPT OF "ACCRUED PROPERTY RIGHTS" WOULD DEPRIVE IT OF THE FLEXIBILITY AND BOLDNESS IN ADJUSTMENT TO EVER-CHANGING CONDITIONS WHICH IT DEMANDS AND WHICH CONGRESS PROBABLY HAD IN MIND WHEN IT EXPRESSLY RESERVED THE RIGHT TO ALTER, AMEND OR REPEAL ANY PROVISION OF THE ACT. PP. 610-611.

The basic gist of the ruling is that systemic flexibility is built into Social Security (specifically, Section 1104) in order to ensure that the system can respond to social changes.  The logical conclusion from this assertion is that Congressional power to tweak the eligibility requirements negates citizens’ claims to benefits.

In plain English, no one is guaranteed Social Security benefits.  The payroll “contribution” is merely a tax.  All the claims of people “deserving” their Social Security check is pure bunk.  Quite simply, you pay a tax, and are guaranteed nothing in return.  You have no legal ground to demand Social Security payments.

There have been plenty of politicians who have claimed that Social Security is like a retirement account, that you get back what you pay in, plus a return on investment.  They lied.  And you are a fool if you believed them.

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