Social Security and Clickbait…Often Related to Myths and Misunderstandings - syossetadvance.com; AMAC Foundation
Closing out this week’s round of Social Security postings, we take yet another page from Tom Margenau’s playbook. In a post today on syossetadvance.com, this distinguished and well-respected 32-year veteran of Social Security skirmishes examines one of the more common ploys used by marketers to entice readers to view their offerings, often deceptively. Specifically, he dissects the use of “clickbait,” which uses sensationalized language to entice web browsers to visit a website they’d otherwise ignore, often through misleading descriptions.
Unfortunately, as public interest in Social Security’s financial problems grows, this form of reader manipulation also appears to be on the rise. In his post, which you can read in full here, Margenau describes some of the more common ploys, like characterizing routine Social Security parameter changes with words that cause readers to envision major policy changes. Other examples use language that implies the site will reveal hidden loopholes that could give readers an advantage. Many are simply perpetuating myths and misunderstandings that have persisted publicly for many years.
Margenau concludes his post with advice to discuss Social Security matters with trusted advisors and to avoid relying on clickbait content. To this, we would add: Do your research and contact reputable sources, such as the AMAC Foundation Social Security Advisor Service, with your questions. Click here to learn more about this free service and how to access it.
What about Those Myths?
As our Advisory Service has noted on this website over the years, we often encounter persistent rumors and myths about Social Security and its various aspects and operations. Some are easily debunked, as in the case of the “Social Security’s going bankrupt” hysteria, or the widely-held belief that those filing early will receive a bump-up in benefits when they reach full retirement age. Others require more complete and careful explanation, and we recently dealt with one of these that we’re sharing in this post.
The myth in question here is the idea that the trust funds held in the Social Security System do not exist, and are simply gimmicks to prop up the perception that the program’s funding does not constitute a “Ponzi Scheme.” The reality is that Social Security’s program income historically exceeded benefit payments and administrative costs through 2020, with 2021 expected to reverse that trend. The result, then, was the accumulation of a positive balance in the trust funds in the amount of roughly $2.9 trillion, as documented in the 2020 Social Security Trustees Report. These funds, which will be used to continue promised benefits until the trust accounts are depleted, are invested in special U.S. Treasury bonds earning interest for the program while held and are available for redemption at maturity or when needed to pay benefits.
It’s popular to levy the allegation of a “Ponzi Scheme” at Social Security, but what’s overlooked when making this claim is that Social Security is simply (and by design) a pay-as-you-go structure wherein current workers fund benefits for current retirees, and is essentially considered to be a contract between generations. One of the key differentiating factors between Ponzi schemes and Social Security is that Social Security is mandated by law and transparently promises benefits based on established workforce projections over a defined planning horizon. These projections, along with a complete accounting of the program’s finances and obligations, are presented annually in the Social Security Trustees’ report to the public.