The White House has gone out of its way to point to Donald Trump’s repeated promises not to touch America’s successful and popular universal social programs, with one recent official statement asserting that “the Trump Administration will not cut Social Security, Medicare, or Medicaid benefits,” impatiently adding that “Trump himself has said it (over and over and over again).” Trump has indeed said this more than once, so why are people not taking his promises at face value?
Perhaps it is because Trump also said (over and over and over again) that he would reduce consumer prices on Day One of his second presidency, yet even before he took office, he backtracked and moaned that “[i]t’s hard to bring things down once they’re up. You know, it’s very hard.” Or perhaps it is because Trump also said (over and over and over again) that he would be able to end the Russian war of aggression in Ukraine within 24 hours, but he later backtracked and said that he was “being a little bit sarcastic,” adding: “What I really mean is I’d like to get it settled and, I’ll, I think, I think I’ll be successful.”
Or perhaps it might be because Trump is the leader of the party that has spent decades attacking Social Security and other essential government programs. During the 2024 presidential primaries, for example, several of Trump’s ostensible rivals for the Republican nomination revived their party’s attack on Social Security specifically, saying that they wanted to cut the benefits that will be paid to younger people when they ultimately retire.
To their minimal credit, those other Republicans described plans that would prevent Social Security from reducing the earned benefits of current retirees and those in their last years of working. As I described in Part One of this column yesterday, however, the Trump team has been busily undermining Social Security in more immediate ways, including Elon Musk’s attacks on the Social Security Administration’s work force, which is now buckling under those job cuts and other attacks on the nation’s indispensable retirement program.
So despite Trump’s having said over and over and over again that he would not do this very bad thing, it might be wise to consider the very real possibility that he in fact is already in the process of doing it. We also need to ask why that would indeed be very, very harmful to Americans. Therefore, here in Part Two today, I will explain why the efforts by Trump and the Republicans to undermine or eliminate Social Security are so very unwise and even cruel.
From Ponzi to Privatization and the Attack on Young People
I devoted most of Part One to explaining why Musk and others are wrong to slander Social Security as a dastardly Ponzi scheme. Interested readers can find my full argument there, but the important point here is that the follow-up to the Social Security-as-Ponzi-scheme argument goes like this: “Oh, so even though the system really isn’t a Ponzi scheme, it’s still a bad investment and should be turned into a privatized system of individual retirement accounts.”
As I explained yesterday, the false Ponzi comparison is based on the idea that in every pyramid scheme, the last people duped into the fraud are the ones who lose everything, because at some point there are no new suckers left to pull in. And who are the “last ones in” for Social Security? By definition, the answer must be young people, who are the most recent entrants into a system that is based on lifelong participation. The not at all subtle claim, then, is that young people are the ones who are being duped.
That is plainly wrong, but this public relations campaign is supported by endless planted news stories about Social Security supposedly being headed toward bankruptcy (which is impossible, but I digress) or misrepresenting the implications of an aging Baby Boom. There is a very occasional exception where a mainstream news source refuses to scaremonger about Social Security, but the drumbeat of negative stories is designed to wear people down with a confusing and relentless big lie.
The goal of such disinformation is to make young people in particular give up on the system. I even heard an economist say once (in public) that “we might as well cut Social Security benefits for young people, because we’ve already convinced them that the system is broken anyway.” So because Republicans lied to young people, it is apparently acceptable to make their lives worse because they might believe the lie? The malevolence is bottomless.
The two-step from Ponzi to Privatization is thus especially insidious because it begins by further undermining younger people’s willingness to protect Social Security, but the supposed solution would be even worse. The further message to younger people from the political right has been that the system favors the Baby Boomers and hurts everyone else, from Gen X on down. That is completely wrong, but even if it were true, a transition to private accounts would be harmful specifically to younger people, not Baby Boomers. Why? Because, as Trump’s erstwhile primary opponents all said, the transition to private accounts would protect the people who have already relied throughout their lives on the promise of full Social Security benefits, leaving younger generations with a double burden.
How would their burden be doubled? Because if we say that Boomers will still receive their full benefits, then the children and grandchildren of Boomers will have to continue to pay taxes to cover their parents’ and grandparents’ benefits, and those younger people will be forced to reduce their consumption even more during their working years. They will have no choice but to do so, because they will need to set aside enough money in private savings accounts to cover their own retirement needs. And it is essential to remember that those private accounts would carry hefty fees that are not charged by the Social Security system, a huge transfer of money that just might explain Republicans’ enthusiasm for pushing the retirement system into the grasping hands of Wall Street money managers.
In other words, telling younger people that Social Security is bad for them (because it might not pay quite as many benefits as promised—although it might) is a ruse to get them to support something that is unambiguously worse for them: “You have to pay for your elders’ retirements even as we make it so that every other generation—starting with yours—is on its own. Good luck with that!”
Why Is Social Security So Important?
As bad as all of that is, at least Republicans had until now mostly not talked openly about actually cutting off people who are already too old to put enough money into private accounts to support their retirements. With Musk’s deliberate sabotage of the administrative structure that makes Social Security work, however, cutoffs to vulnerable seniors have become a very real and immediate possibility.
In Part One of this column, I promised that Part Two would explain three facts: “Social Security is the most successful social program in history; it serves an essential purpose; [and] it is amazingly inexpensive to run.” The first two run together, because Social Security succeeded in serving the essential purpose of significantly reducing and preventing privation in old age.
Social Security is the most successful social program in history not only because it is completely sustainable but also because it substantially solved a serious real-world problem: elder poverty. When President Franklin Delano Roosevelt signed the Social Security Act in 1935, the Great Depression had thrown many people into economic distress, but the pain was especially acute for the elderly.
The poverty rate among seniors at that time was approximately 50 percent. In 2022, that number was down to 10.2 percent (still too high, to be sure, but a historic achievement), and currently “Social Security keeps 22.7 million Americans out of poverty, 73% of who are senior citizens.” Note that Social Security helps non-elderly people, because the system also provides disability benefits and survivors’ benefits. (Disclosure: my father died when I was 15 years old, and his Social Security benefits allowed me to pay for college when the time came). Regarding disability benefits, the immediate crisis that Musk’s cuts have created is centered on disabled elderly people who are being forced to prove their eligibility by either going online (even though many such people have neither the knowledge nor the hardware to do so) or to transport themselves to Social Security offices (that is, the offices that have not yet been shuttered) to talk to the remaining employees who have not yet been fired.
Meanwhile, only half of people aged 55-74 had any retirement savings in 2022, meaning that Social Security is the only source of income in retirement for half of all Americans. Even those who do have some retirement savings with very rare exceptions do not have nearly enough, with the median for people aged 55-74 being about $200,000 in total. If that were a person’s entire source of support in retirement, it would allow them to spend (even if the money is well invested) only $15,000 per year for twenty years. And again, that is the median, meaning that half of all near-retired and retired people have less than that, some with nothing at all.
That should bother anyone with an ounce of human decency, but it should even bother a coldblooded younger person who thinks that older people are someone else’s problem. Every younger person with a parent or other elderly relative could soon find themselves being asked to allow their post-Social Security-cuts destitute loved on to live with them, and the elders who are not so lucky will soon be on the streets, where they will affect the quality of life of even the most selfish younger people.
The Dreaded Word Efficiency
Finally, what about the buzzword of the year: efficiency? Musk’s unelected and unconfirmed role in the Trump administration is based on his supposed ability to increase government efficiency (although the name of his ersatz agency was reverse engineered from the name of a cryptocurrency that he apparently thinks is awesome, which in turn was derived from a 2013 meme involving a Shiba Inu dog). The problem is that, even among economists, efficiency is hardly self-defining.
There is, in fact, no definition of efficiency that is truly objective, meaning that even many trained economists use that word in at best uninformed—and at worst dishonest—ways. Among the many possible definitions, however, the least objectionable is the idea that a policy is efficient if it provides more overall benefits than it costs.
By that definition, however, Social Security should be expanded, not cut or eliminated. This is in essence a “bang for the buck” idea, and the societal benefits of reducing elder (and other) poverty are substantial and more than pay for themselves by making it unnecessary to run expensive and onerous means-tested programs that deal with poverty after the fact rather than preventing it from occurring in the first place.
Why is means-testing such a problem? According to the Center on Budget and Policy Priorities: “Universal participation and the absence of means-testing make Social Security very efficient to administer.… Means-testing Social Security would impose significant reporting and processing burdens on both recipients and administrators, undercutting many of those advantages while yielding little savings.” In other words, Social Security is efficient in this somewhat narrower sense simply because it obviates the need to resort to more expensive alternatives.
But what puts the ultimate lie to Musk’s claim of increasing efficiency is in the sentence that I omitted with the ellipsis in the quoted passage above: “Administrative costs amount to only 0.5 percent of annual benefits, far below the percentages for private retirement annuities.” That means that the entirety of the costs for running the Social Security program are extremely low, probably the lowest of any entity—private or public—known to humankind. If we truly want to be “efficient,” one would think that we would keep (and expand) a program that runs on a shoestring budget while it delivers benefits far out of proportion to its modest costs.
To put it differently: Ya want government efficiency? I got yer government efficiency right here, pal! The Silicon Valley “disruptor” ethos ultimately relies on the idea that people have not already figured out how to do things smoothly and effectively at the lowest cost feasible for the task at hand. That sometimes works with new technologies (but sometimes not, as we saw when Musk bought and immediately made Twitter much worse, destroying most of its market value), but societies have been figuring out how to run universal pension programs for nearly a century, and they already had gotten it right. People on the wrong side of the Dunning–Kruger effect think that they are smarter than everyone else, however, so of course the Musk-ovites believe that they and only they know how to run things about which they in fact know nothing.
In short, the Republicans who have for decades been trying to destroy Social Security and other social programs have had no choice but to lie about the program. Beyond the Ponzi lie, they must fabricate stories even to justify relatively long-term changes to the system (such as changes in the retirement age), much less to mutate the system over time into private accounts or to kill it off entirely.
We can only hope that the Musk-Trump team will be too busy dealing with their other self-inflicted political wounds and will never get back to further ruining what should be Americans’ golden years.
