Social InSecurity

I recently got a very thoughtful message from John Mauldin ( entitled "Social Security's Flawed Assumption". Here is an excerpt:

"And now let me speak a heresy. We need to recognize that Social Security is not a retirement program, like a pension or 401k plan. It is a welfare program. It transfers money from one group to another group."

John's statement that Social Security is not a retirement program is somewhat of a new thought for me. I have always thought of Social Security as a long-term savings program that I have contributed to for 38+ years. My belief was that funds would be available for regular withdrawal when I reached the age of 65. So, John's assertation is a bit startling for me. In one sense I agree with him because the funds are coming from current contributors and not funds previously contributed. But I disagree with John because ... at it's core ... Social Security is a program that a person contributes to and withdraws from - that looks a lot more like a savings or 401k program than a welfare program.

While I understand that, at it's onset, Social Security might have looked a little like welfare, I think that it is not helpful to describe it in this manner today. I am convinced that all of Social Security disbursements I receive in my lifetime will not surpass the amounts I contributed to the program. If it is welfare then those on the dole are not the recipients of Social Security payments but those in government who, like parasites, live off of it.

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