How Social Security Picks Your Pocket
A story of Waste, Fraud, and Inequities
by Joseph N. Fried, CPA (Algora Publishing, 2003) [Joseph N. Fried is the Director of the Public Program Testing Organization and the author of Democrats and Republicans - Rhetoric and Reality (Algora Publishing, 2008).]
A strange Social Security scandal is taking place in Texas, and it has already cost the trust fund one-half billion dollars. The scam involves Texas teachers who become janitors for just one day – the last day of their careers. By so doing, they bilk the Social Security trust fund out of about $100,000 – each. Thousands of teachers have recently used this loophole, and they are continuing to do so. And, the Social Security Administration says it is perfectly legal.
This is just one of the examples of the waste, outlined in How Social Security Picks Your Pocket. Other subjects include:
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Senior citizen tax rates that can effectively exceed 100% of income. |
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The inequitable shifting of benefits from the middle class to the wealthy – even to millionaires. |
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Retirement “apartheid” – i.e., government sanctioned systems that are separate and unequal |
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Crazy Checks and Lazy Checks, and the difficulty of identifying those who are truly disabled |
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The reasons why only 1 disabled beneficiary in 500 recovers and returns to work |
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Social Security disability trends versus the real disability trends |
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The pros and cons of Personal Retirement Accounts |
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A very unique recommendation with regard to the Trust Fund |
Recently published, the book has already won acclaim.
"Buy the book," states David Hogberg in the American Spectator. It's "chock full of examples that both anger and entertain."
Distinguished economist Dr. Walter E. Williams states:
“Joseph Fried has put together an excellent examination of our government Social Security program and why it must be changed…Plus, the book is a fun read.”
Praise also comes from Jameson Campaigne, Jr., Secretary of the American Conservative Union:
“Mr. Fried has done three things here: written a cracking good story, revealed everything important about the retirement system for most Americans, and offered solutions to the looming disaster that are worth your consideration.”
Each area of waste is defined and quantified, and expressed as dollars that will be wasted in each of the next 75 years. Methodology is presented.
Social Security and the Family
Edited by Mel
issa Favreault, Frank Sammartino,
C. Eugene Steuerle (Urban Institute Press, 2002)
"This
excellent book fills a major gap in the Social Security reform debate. It
addresses issues – working women, child-rearing, new family patterns – that are
fundamental to setting the system right. It underscores that achieving financial
balance is only a part of the problem. Its incisive analysis and balanced
recommendations as to how to achieve greater fairness and improve the efficiency
of the system need to be urgently considered. A must read for everyone who wants
to better understand Social Security policy."
--Stanford G. Ross,
Chairman, Social Security Advisory Board, formerly, Commissioner of Social
Security
by Abraham Ellis (Foundation for Economic Education, 1996, 1971)
First written in 1971, this is a book that has stood the test of time. After giving a brief historical overview of the program, Mr. Ellis thoroughly outlines the semantics that have been used to deceive the public with regard to Social Security. Words such as "trust fund" and "insurance" have been repeatedly used to give the program an aura of fairness and financial soundness. However, the author asks, "Can you imagine the XYZ Insurance Company being allowed to 'invest' its reserves by spending them all for executive salaries and entertainment expenses, and then substituting its own IOU as a 'reserve' out of which it will hope to pay annuities or benefits to its policy-holders?"
Other subjects explored include inter- and intra-generational wealth transfers in Social Security, the politics of Social Security, and the its pending insolvency.
In the Afterword, written in 1996, the author advocates privatization reforms, patterned after Chile's social security system.
by Sylvester J. Schieber and John B. Shoven (Yale University Press, 1999)
In
addition to an extensive review of the history of Social Security in America,
this book includes the authors' proposal of a plan to bring the system into long
term financial solvency. The proposal calls for a 2.5% tax increase, and
benefits paid in two tiers. Tier one would pay a $500 per month benefit to
anyone who has worked for at least 35 years. For shorter careers there
would be a pro-rated benefit. Earnings level would be immaterial for tier
one benefits. Tier two would be a defined contribution plan, financed with
5% of the total payroll taxes. Half would come from the employee and half
from the employer. The employee would have some discretion regarding how
the funds would be invested, within limits. Upon retirement, all of the
tier one benefits, and half of the tier two benefits would have to be annuitized
in a manner similar to the current Social Security program. However, the
retiree would have discretion concerning the form of payout for the other half
of the tier two benefits.
We see some desirable and undesirable elements in this proposal. On the good side of the equation, there would be better benefits for young workers, long-term solvency, the inclusion of 5 million state and local workers into the system (to correct the present inequitable exclusion of these workers), and the elimination of the earnings test for people who collect Social Security benefits while working.
On the negative side, there would be a 2.5% payroll tax increase, a gradual increase in the retirement age beyond age 67, and a raising of the minimum retirement age from age 62 to age 65. In addition, the tier one benefits proposal would be subject to manipulation because people would make sure they acquired the 35 years of work credits - one way or another. Also, we question the wisdom of increasing the survivors benefit. (The authors propose an increase from 2/3 to 3/4 of the deceased retiree's benefit.) Presently, most survivors benefit goes to high-earner retirees. We would advise that any increase in this benefit be accompanied by "means testing."