Social Security Is Protection From An Activist Congress

Social Security’s rising costs restrain the growth of the federal government. Yes, you read that right.

That’s why it would be a major blunder if deficit hawks and self-proclaimed limited government proponents get their wish to reform it. Don’t let them.

To see why reform would be a big mistake, consider the meaning of the projected 2032 insolvency date for Social Security. This is bullish. Yes, you read that right too.

Precisely because Congress will never shrink Social Security benefits to avoid insolvency, the funds required to avoid benefit cuts will have to come out of general revenues. Good. Mistaken as Social Security was and is, it’s priced. Better yet, Americans have worked around it as evidenced by their sizable savings in retirement accounts.

Which means Social Security’s gargantuan funding needs will yet again limit spending priorities and would-be spending initiatives away from Social Security. Translated, let Social Security swallow up growing portions of the federal budget.

For decades Congress has spent any excess raised by the Social Security tax, so now let’s reverse it whereby Congress must keep the program afloat. Every dollar spent on Social Security is one less dollar that Congress has to direct to existing or new programs.

Only for the story to become more bullish. In an editorial expressive of fear about Social Security’s looming insolvency, the Washington Post asked why it’s “designed in such a way that $1.28 trillion — over 4 percent of the entire economy — is not enough money to fund it.” Why indeed.

What a mistaken program Social Security is, but it’s once again priced and we’ve once again worked and saved around it. Implied in reform of what’s so expensive that 4 percent of the world’s largest economy isn’t enough to fund it, is that Congress could fund all manner of other, “better” priorities if Social Security weren’t such a size consumer of federal tax dollars. No thanks.

Not thought about enough is just what Congress would do if it weren’t encumbered by Social Security. In contemplating the latter, hopefully readers see that it’s not something Americans should strive to find out. Better to allow Social Security to yet again swallow growing portions of the federal budget. Only for the story to get even more bullish.

Consider again how costly Social Security is. Quoting the Post editorial again, “over 4 percent of the entire economy — is not enough money to fund it.” Yes, bullish. And that’s not a defense of Social Security. What a disastrous program.

Just the same, and with this piece clear that Social Security is a disaster, it’s worth asking how disastrous it is relative to whatever else Congress might come up with. Precisely due to Social Security’s size we can rejoice in how its size limits Congress’s ability to come up with much worse. And there would be much worse.

Let’s just make sure to not find out what “much worse” is. Government spending at its worst funds wars, but even on a good day it funds stasis. Yes, government spending weakens us. Since it does, let’s not allow Social Security reform that would only succeed insofar as it would free Congress to spend more on us. Again, no thanks.

Social Security is better as protection from Congress. Reform would remove the protection.

Originally published on Real Clear Markets.