Social Security : From Thomas Jefferson to Francis Underwood

While many have tried, few writers have proven in writing as effective as Thomas Jefferson at criticizing Social Security. 

In a 1798 letter, Jefferson, who died more than a century before Social Security reached the public’s conscience, laid out one of the most compelling arguments ever written against the program as it exists today. It was wasn't a rant about the size of government or a philosophical look at fairness and the rights of man. He said that "intergenerational contacts" were not valid, and likely would not be honored.

Specifically, he wrote a letter to Madison that dealt with the consequences of enabling one generation to lay debts upon another. In sum, he predicted that eventually a generation would, “eat up the usufruct [the right to enjoy the use and advantages of another's property short of the destruction of its substance] of the lands for several generations to come.”

That sounds a lot like Social Security, which has a shortfall of more than $40 trillion. That figure means that the program’s remedy would require nearly double the nation's GDP or “the usufruct of the lands.” At this point, our politicians are struggling to explain this breathtaking financial gap and to propose a way to fill it. 

How did we get here? 

We nominally cling to the notion that the money was misused or that unforeseen demographic shifts have somehow complicated the best laid politics of mice and men. In other words, hidden hobgoblins menaced the system far beyond the control of our current politicians, whose main complaint is there is no way to push these costs out to even further generations.

Jefferson said nothing about demographics or financial malfeasance. He said that the public council–Congress–would place the self-interest of re-election over the long-term interests of the general public. In just this fashion, Congress ‘expanded’ Social Security for decades without any consideration for how to pay for it, because voters love benefits, but hate the costs. In other words, Congress was giving dollars to voters for dimes, while leaving the balance left to a future generations through the Social Security system.

The Path to Crisis

The Social Security system sold dollars for dimes for decades, and we wonder how such a concept could possibly fail. Over decades, Congress larded benefits upon an ever-widening number of voters in an ever-increasing balance of checks.  They added benefits for spouses, children, ex-spouses, COLAs, and survivors without providing an incremental source of revenue to pay for the bills. Mind you, Congress now wants to give away more based on the idea that future generations will contribute more to Social Security.

The pathway for the approaching crisis was created in 1983 with short-sighted legislation, which was made necessary by an imminent crisis created by even earlier lapses in legislative judgement. For 80 years, Congress has created deals in which their children will pay the taxes that voters won’t and accept the benefit cuts that no one would even discuss. As a result, it is not possible to kick the can down the road anymore.

The crisis coming in Social Security will manifest Jefferson’s “lands holden in tail.” In 1983, law makers protected those who were 45 and older from the consequence of the dollars for dimes math of the system. By 2005, we nominally talked about protecting those 55 and older. Now someone turning 72 this year expects to out live full benefits defined in current law.

Jefferson’s letter serves as a somber presage for politicians promising to keep Social Security’s promises to seniors. He reasoned that “the earth belongs in usufruct to the living; that the dead have neither powers nor rights over it.” In other words, today’s workers cannot be bound by the promises of a past Congress, much less the promises of past promises.

Clearly, we are not there yet, but Jefferson’s reasoning implies that one day a politician will emerge who will serve the new generation. At some point, younger Americans will elect a Francis Underwood, who in turn will tell seniors, “We owe you nothing.”

And Thomas Jefferson would not only agree, but say, I told you so.