This year will go down in my books as the year of Internet hogwash — at least as far as Social Security is concerned. It seems that I spent half my columns in 2011 dispelling all the myths, rumors, half-truths and outright lies about Social Security that are being spread on the World Wide Web.
Actually, most of the gobbledygook is nothing new. Most of these stories have been around for years. It’s just that in the past, the lies were spread rather harmlessly between two coworkers sitting in their lunchroom or among a few neighbors chatting over the back yard fence.
But today they’re being spread to millions of people with the push of a button over the Web. And sadly, their very ubiquity lends them credence. If you see or read something often enough on the Internet, no matter how preposterous it might seem, you tend to think it might be true.
So here are some of the most ridiculous Internet rumors that muddied the Web — and people’s understanding about Social Security — during the past year.
INTERNET LIE: Congress has stolen Social Security funds and used the money for other purposes.
THE TRUTH: This isn’t so much an outright lie as it is a gross distortion of the facts. And it certainly isn’t anything new for 2011. I’ve worked with Social Security issues for 40 years now, and I don’t think a day has gone by in the past four decades in which I haven’t heard some version of this story.
I like to explain it this way: Every day, about $2 billion funnels into the Treasury Department in the form of Social Security tax collections. Every nickel of that money is immediately converted to U.S. treasury bonds. Three times each month, a portion of those bonds are converted to cash to pay for Social Security benefits sent out to 50 million recipients. The rest of the money is spent to help fund other operations of government. But the Social Security system still holds the treasury notes.
And that’s the key. If you have some treasury bonds as part of your investment portfolio, do you complain because the government has spent your money (the money you invested in those bonds) for other purposes? Of course not! You expected them to do just that. But you feel safe because you hold the bonds. Likewise, the Social Security trust funds are safe because they still hold the bonds.
INTERNET LIE: Social Security trust fund bonds are simply valueless IOUs. They aren’t worth the paper they’re printed on.
THE TRUTH: Millions of investors around the world hold U.S. treasury bonds in their portfolios. Do they think of them as worthless IOUs? Quite the contrary; they’re often considered the safest investment a person can make. The same is true for the bonds held by the Social Security system.
INTERNET LIE: President Lyndon Johnson moved Social Security money to the general fund so he could spend it.
THE TRUTH: President Johnson merely changed an internal government bookkeeping practice, a procedure that has been followed by every administration Democratic or Republican since.
Social Security’s income and expenditures have always been kept on a completely separate set of books. Johnson simply merged those Social Security ledgers into the government’s overall budget. He did it for a sneaky reason: Social Security’s surpluses helped mask the huge deficits he was running up because of the Vietnam War. But that bookkeeping sleight-of-hand doesn’t change the way Social Security has always been financed.
Think of it this way: A husband and wife both work. They keep completely separate bank accounts. The husband spends all his money. The wife saves every nickel she makes. They decide to merge their accounts. Even though the wife is still saving all her money, the husband suddenly looks richer — at least on paper.
INTERNET LIE: Social Security is going bankrupt because of all the deadbeats who are being paid disability benefits, and this is siphoning money away from more deserving seniors.
THE TRUTH: The Social Security disability program is funded and managed separately from the retirement program. Anything paid to someone with a disability does not take one nickel away from a retired person.
And despite all the allegations of fraud, the Social Security disability program is known for having very stringent eligibility rules. You simply don’t qualify for benefits unless you have a very severe disability.
INTERNET LIE: Social Security benefits and other forms of government help are routinely paid to illegal immigrants.
THE TRUTH: You must be an American citizen or you must be living in this country legally to qualify for any kind of Social Security benefit.
And even more stringent rules apply to this country’s primary welfare program: Supplemental Security Income, or SSI. With some very minor exceptions, you must be a U.S. citizen to qualify for SSI.
Finally, let’s clear up one more related misunderstanding. Even though the SSI program is run by the Social Security Administration, it’s not paid for out of Social Security taxes. It’s funded by general tax revenues.
If you have a Social Security question, Tom Margenau has the answer. You can contact him at firstname.lastname@example.org. To find out more about Tom Margenau and to read past columns and to see features from other Creators Syndicate writers and cartoonists, visit the Creators website at www.creators.com.
COPYRIGHT 2011 CREATORS.COM