The Social Security Myth

I missed this blog entry last week. It seems very relavant as B Hussein starts talking about his economic policies.

From the EconLog:

Andrew Biggs writes,

First, Sen. Obama says, "Social Security has lifted millions of seniors and their families out of poverty. Without it, nearly 50 percent of seniors would live below the poverty line."

This is a common talking point, but let's be clear on what it means: if we forced people to pay Social Security taxes all their lives but didn't pay them any benefits, yes, nearly 50 percent of seniors would live below the poverty line. But this is a silly standard. If we were truly "without" Social Security, we would also be without Social Security taxes, which individuals could then save on their own for retirement. So the better question would be, "Without Social Security taxes and benefits, what would the poverty rate among seniors be?"

The answer is, about the same as the current rate. In the 1930's, many seniors were poor. Today, most seniors are affluent. It is tempting to credit Social Security. However, the main cause is economic growth.

Take away the economic growth of the last 75 years and leave Social Security, and seniors would still be poor. Take away Social Security and leave the economic growth, and most seniors would be affluent.