Many are calling for a cutback in "entitlements" as a means of "cutting spending"; spending being another "dirty word". The subtext of the use of "entitlement" is that the recipients are not deserving of the payments from Social Security, Medicare, or pensions for government employees.
My wife and I each get a small monthly pension payment from a company that we both had worked for long ago. This pension was paid for by the company. It was one of the terms of our employment. Is this an entitlement that we don't deserve? Should the company take the funds in the pension trust to spend elsewhere to balance its budget?
A fired CEO is granted a life-time pension far greater than many people even dream of for a regular income. Isn't this an entitlement? Maybe it's a bribe not to sue the company for wrongful termination. We don't hear many who complain about Social Security being an entitlement complaining about how shareholder value is being decreased by these give-aways.
Many shareholders expect regular dividends from companies whose shares they own. Isn't this an entitlement? Shouldn't companies paying large dividends cut this spending so they can invest and create more jobs?
Social Security is a contract between the worker and the Federal government. The worker (and employer) make payments to the Social Security Trust Fund based on the worker's wages. The worker has been promised benefits in relation to the amount of payments made. The employer is relieved of having a pension fund or can at least have a bit smaller pension fund. Isn't Social Security an entitlement just like company pensions, CEO pensions, and dividends? Why is one entitlement bad and why are the others good?
I think there are two reasons.
First, Social Security is bad because it is a government program; government programs are bad because government can't do anything right (except give subsidies to favored companies). My wife just said, "Bail out bankers who plundered customer resources". Aren't the super-big bonuses an entitlement?
Second, Social Security funds are placed in interest-bearing government securities. These securities are part of the government debt and debt is bad. Somehow, it is not bad for large corporations to hold these securities and be paid interest.
One can make all kinds of arguments about how much or how little is paid from Social Security and under what conditions. But as long as people expect Social Security checks on retirement AND pay the payroll tax, we should consider Social Security not an entitlement, but a contract.
