1996-1997 Harry Singer Foundation National Essay Contest
Social Security Misconceptions
Concordia High School, Concordia, Kansas
Teacher : Timothy Berger
1st Amy Hubert 
1st Bradley Henry 
2nd Crystal Campbell
3rd Nicole Ringer
"Social Security is a major focus of political debate today. There are opposing sides to each issue concerning Social Security, and different people defend each side. All of these present their arguments to the public, which gives the people a mixed message and causes many misconceptions. Each side presents its ideas as absolute fact, and this leads to confusion over what is the real truth. Two of these confusing issues are whether or not Social Security will run out of money, and whether the system helps or hurts the United States economy.
The first topic is whether or not Social Security can continue to pay benefits indefinitely or if it will go bankrupt sometime in the near future. The majority of the public believes the latter. A recent poll found that 'more people 18-34 believe in UFO's than the future of Social Security. 'One cause of this belief is the fact that the baby boom generation will soon reach retirement age. This will cause an increase in the number of people receiving benefits as well as a decrease in the number in the work force to pay for those benefits. 'In 1950 there were sixteen workers for each individual receiving benefits. When the baby boomers are into retirement, there will be two workers for each recipient' . Having less people to pay more benefits could cause the system to run out of money. Supporters of Social Security argue that this will not happen because surpluses will accumulate in trust funds now, enabling payment to baby boomers later. Their opponents, however, say that there is no real trust fund. It is a 'bookkeeping deception'. The money Social Security collects actually goes into the General Treasury of the United States, and all that the trust funds contain are IOU's from the federal government. There is really no accumulation of money, and therefore nothing to give the baby boomers. A final argument denying Social Security's future is that it was set up poorly from the beginning. 'In theory, Social Security is a form of 'insurance.' In practice, it is a 'ponzi scheme' which works very much like an illegal chain letter. The system is both actuarially unsound and bankrupt-and soon the chain must break'. According to this source, Social Security was bound to fail from the very beginning.
Taking the opposite stand on this issue are many politicians and the Social Security Administration itself. They argue that Social Security is in no danger and will continue to work in the future. The Social Security Administration says that, 'The latest report indicates that the Social Security system, as currently structured, will be able to pay benefits well into the next century'. They also say that, 'up until the baby boom generation reaches retirement age, the Social Security pension and disability trust funds are projected to build up substantial reserves'. So, in their eyes, there is no need to worry about the baby boomers throwing everything off, because the extra money they are contributing now will go the pay their benefits down the road. The Social Security Administration also contends that the number of people in the work force is actually increasing, due to rising numbers of women and immigrants needing jobs. More people paying into the system would strengthen it for the future. Still others supporting Social Security say that even if the system is currently on the road to bankruptcy, it will not be allowed to die away. Too many people depend on it. Elderly citizens provide a strong political base,which will force Congress or the President to find a way to reform Social Security before it is no longer effective.
A second issue is that of the system's effect on the economy. Some people argue that Social Security is a drain on the economy. The U.S. is currently around six trillion dollars in debt. Any system that may cause this figure to increase is harmful to the economy. Social Security is one such system. Some studies show that Social Security and Medicare spending are, 'the main cause of our large deficit and our growing debt,' and 'the burdens of debt…threaten the economy and the livelihood of future generations'. Another argument against Social Security is that, 'almost all taxes cause distortions in the economy, which are burdensome to taxpayers but produce no additional revenue for the government,'and 'enormous taxes threaten ultimately to destroy national economies'. This says that any tax does more harm to the economy than good, so Social Security, as a tax, is essentially harmful. Finally, if the Social Security system collapses, the people currently receiving benefits will lose a major source of income, which may plunge many of them into poverty and cause even more damage to the economy.
But again their is another side to the story. Others say that Social Security not only does not harm the economy, it actually helps it. One source claims that 'Far from contributing to the deficits, Social Security with its surpluses is actually helping to reduce government borrowing'. This is because the trust funds are invested in federal bonds, giving the government more money and helping to balance the budget. Another argument for Social Security is that it keeps people out of poverty. It 'has made a substantial contribution to raising people's income above the poverty level. It is estimated that if there were no Social Security, there would be almost four aged poor persons for every one that is now classified as poor'. This makes up for any cost the system may inflict on the economy.
Social Security is perhaps the most confusing system in the United
States government, but it affects every American throughout his/her life. This makes it
necessary for the public to keep informed. The system has benefits and drawbacks that
Americans need to know about, but until politicians and the media stop giving people
contradictory information, the public may never know the whole truth."
Amy Hubert, Concordia High School, Concordia, Kansas