21 car century insurance: 89 percent of Boomers agree

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There's been a lot of discussion on social media lately about Boomers and Social Security -- a recent poll finds an overwhelming majority (89 percent!) of them in favor of increasing taxes on the youngest and poorest working cohort in order to maintain those payments at existing levels.

That means the income of the youngest and poorest should go down, while the income of the wealthiest cohort (namely, themselves) should stay the same.

You would think people who hold opinions like that would have enough shame not to discuss them publicly, but no: social media is currently flooded with Boomers, who have somehow never managed to figure out how Social Security works, trying to defend their desire to make younger people work harder for them.

"I'm not asking for anything from anyone; I just want what I paid into the system," goes the typical reply.

Well, it is a genuine shame, and I am not saying that sarcastically, but what you "paid into" the system is long gone, and certainly not stored in a little envelope with your name on it. It was used to pay general expenses long ago, as the authorities told you it would be if you had read the fine print.

Meanwhile, because of favorable ratios of older workers to younger workers, what you got out of the program is at least several times as much as you "paid in," and current workers, if they receive anything at all, will receive much less than they "pay in."

The insurance analogy for Social Security is so powerful an image in the public mind that I will get pushback even from my own subscribers, on a list full of dissidents.

In public, Franklin Roosevelt loved using the insurance analogy when trying to win approval for Social Security, because the insurance industry had a good reputation among the public at the time. But in the statutory language he resolutely avoided it, because he knew that a Supreme Court that cared about the Constitution would demand to know where in that document the administration was finding the power to establish an insurance program.

So the statute was written as two things that he thought he could get away with: taxing and spending. But the two never reference each other.

Title VIII levied a tax on payroll, and Title II authorized benefit payments out of the general Treasury. But the two were never described as having anything to do with each other.

As the Supreme Court concluded in 1960, because the taxes and benefits of the program are legally disconnected, workers do not have an accrued property right to their benefits, which means Congress has the legal authority to alter or amend the program's tax rates and benefit structures at any time. If this were a proper "insurance" program, that would not be the case.

At any rate, there has never been any kind of "lock box," or whatever other nonsense with which the political class tries to snooker the public, that keeps Social Security money segregated from general revenues.

So let's at least be honest with each other about what this is, and not pretend that it is anything other than a transfer from (a) young people just starting out to (b) the wealthiest group of Americans.

These older people were deceived by most sources that taught them about the program, it's true, though let's be honest: it was a voluntary deception. They didn't want to look too closely. The deal they were getting -- seven times as much as they put in, in some cases -- was too lucrative for them to turn over any rocks to see what was crawling there.

Wanting back "what you put in" -- well, I understand the sentiment, and it's a shame people were snookered about that. But what these people are in practice demanding is something far beyond just that, since they are getting back vastly more than they "put in," at the expense of the most vulnerable people in society.

I am seeing people saying: "You paid in, so you're entitled to that money -- let the entitled millennials pay in like we did!"

Yeah, see, when there are a mere two workers supporting every retiree, as opposed to the old days when there used to be 33 workers supporting every retiree, the millennials they have so much contempt for cannot possibly get the same deal Boomers got.

Well, enough about people whose grand ambition is to live off the productive effort of others.

Let me tell you about the opposite kind of person, because I just spent a few days surrounded by a roomful of them.

We've just finished the third and final meeting of the year of my Elite Mastermind, this time in Denver. These are people who build things, who create value instead of scheming to extract it, and who would sooner eat glass than demand that a young stranger's paycheck be looted to prop them up.

We spend the serious hours exactly like this: around a table, working through each other's actual businesses: the pricing problem, the hiring decision, the offer that isn't converting, whatever it is. There is nothing quite like having a dozen sharp, successful minds turn their full attention to your bottleneck for an afternoon. People walk in stuck and walk out with a roadmap.

But all work and no play makes Jack a dull boy, so....

That's my team, suited up and heading into a place called Beat the Bomb -- a series of challenges that ends with one final test: defuse the bomb, or get blasted with (depending on the mission) paint, foam, or slime. We split into teams, and I'm pleased to report mine actually defused the thing.

And then the game master asked if we'd like to get slimed anyway.

We said yes.

This is actually a decent picture of how the whole group operates: we do the hard thing, we win, and then we enjoy ourselves without reservation. The work is serious. The people are not too serious to have a blast together.

That combination is exactly why the bonds in this room are the kind that last for years and produce business breakthroughs long after the meeting ends.

My Elite Mastermind is small on purpose, and it meets three times a year in person.

It has suddenly picked up steam, so we've had to open a second cohort to accommodate the demand. Once that fills up, though, that's it. So if you've been thinking about it, now's the time.

See you there (I'll let you know if you need to bring a Hazmat suit):

https://www.WoodsMastermind.com

Tom Woods