The SUBText: September 2, 2016

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We try to avoid controversy in our writings; we believe our clients retain us for guidance, not bloviating. Imagine our surprise when Monday’s piece brought the conspiracy folks out of the woodwork! Let’s look at their concerns about Social Security:

“The Social Security Trust Fund is nothing but… IOUs. It doesn’t really exist.”: This chestnut came first, and we touched on it Monday. President G.W. Bush didn’t help matters with his statement that “There is no ‘trust fund,’ just IOUs,” Now, the more important statement followed: “See, what’s interesting is a lot of people believe … the government takes a person’s money, invests it, and then pays it back to them upon retirement. It doesn’t work that way,” he said.

What does this mean? Sure, one could see their Social Security benefit as an IOU, like every other tax. We’d submit a more constructive view- we rely on the strength and wisdom of our government to keep a multi-generational promise. We wrote earlier about the “IOUs,” which do exist. However, they’re no more unusual than any other Treasury bond.

“Social Security is a Ponzi scheme.”: It’s important to understand that Social Security is a transparent system, whose Trustees include three Cabinet secretaries, the commissioner of the Social Security Administration, and an independent trustee from each major political party. This group submits an annual analysis to Congress projecting the plan’s solvency far into the future. Certainly, we want to maintain it to assure its effectiveness, but to call it a “scheme” is just… irresponsible.

We promise no soapboxing, so we’ll stop here.

Of course, we are here all day for your questions.

Dennis Crowley, MBA

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dcrowley@vitruviuswealth.com

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