Wonderful. Social security is going into the hole two years ahead of schedule; it’s running 45 billion dollars in the hole for 2011. And still, Democrats like Senator Chuck Schumer continue to call it “the most successful government program of the 20th century”. To quote JammieWearingFool, “I shudder to think what he would consider a failed government program.”¹

The problem is that the government lies about what social security is, and not only that but they force your employer to lie about how much it costs. They know that if you saw that the government was taking over 10% out of your paycheck just for a social security that you’re likely never to see, you’d be even more pissed than you are now.

If you have a 2010 pay stub, look at your social security taxes, and double them—that’s what you’re really paying. It’s just that your employer is told to hide the extra amount from you; you’re paying 12.4%, and only 6.2% shows on your paycheck. If you have a 2011 pay stub, double your social security taxes and then add half again—you’re paying 10.4%, but your employer is only told to show 4.2%, taxing you on the extra 6.2% behind your back.² And that’s not including Medicare, of which the 1.45% on your paycheck is also only half of what you’re actually paying. (If you’re self-employed, you know this, because the full amount comes directly from you.)

So this year, you’re seeing 5.65% for social security and Medicare, but you’re paying 13.3%. I don’t know about you, but there is a lot of money I could be saving for retirement if I weren’t paying 13.3% to 15.3% of my paycheck³ into a couple of welfare schemes that are going to be insolvent before I get to use them anyway. Hell, I’d probably be retired right now.

The number one lie that we need to end if we want to seriously address social security’s problems is to stop lying about how much it costs. Every paycheck should contain the full amount listed as the tax that it is.

The second problem is that social security is a welfare program that’s talked about as if it were a retirement savings program. It is not, and never has been, a savings program. We need to stop lying about that. If it’s welfare, call it a tax. If it’s retirement savings, it needs to be a defined contributions rather than ill-defined benefits. As long as we keep treating a welfare program as if it were a savings plan, we will continue our path to insolvency—and when that happens, nobody will get their “savings”.

The number two lie that we need to end is that social security is some savings account that we pull out of later. That, unfortunately, isn’t a simple fix. It requires someone getting up and telling the truth.