PAUL MORENO: The Truth About Social Security.

The fundamental problem with Social Security is that it is a “defined benefit” pension system masquerading as a “defined contribution” program. Senator Warren says, correctly, that seniors have contributed to the system. But what have they contributed, and what relationship does their contribution have to their benefits? Politicians have understandably been more reluctant to raise taxes (euphemistically called “contributions”) than to raise benefits. The inevitable result has been promises that far exceed resources. . . .

Every year, the Social Security Administration sends me a statement detailing how much I have paid into the system, and projecting how much I (or my wife and dependents) will collect if I continue to contribute at the current rate. But the administration does not include such details as the fact that there will be no funds left for anyone by 2033 — unless the government goes above and beyond the “contributions” to the program and makes payouts from general revenues — and that it is almost certain that future retirees will get less back than they paid in. . . .

Social Security was conceived in dishonesty. FDR understood that the payroll-tax system of funding Social Security was untenable. “I suppose you’re right on the economics,” he told Luther Gulick. But payroll taxes “are politics all the way through. We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and unemployment benefits. With those taxes in there, no damn politician can ever scrap my Social Security program.”