Title: The Myth Buster Part 1 — Smashing Social Security Untruths
Guest: Max Richtman, President & CEO, National Committee to Preserve Social Security and Medicare
Release Date:  3/27/24


Announcer:  It’s You Earned This, the Social Security and Medicare podcast, brought to you by the National Committee to Preserve Social Security and Medicare, and now your host, Walter Gottlieb.

HOST:  Myths have their place in ancient Greece, but myths have no place in public discourse about something as crucial as Social Security. And yet, there are myriad myths about Social Security out there, and they are not helpful in the fight to protect seniors’ earned benefits. Myths like: politicians are stealing from Social Security; undocumented workers are collecting benefits; and the big one, Social Security is going broke.

HOST:  But we’re in luck, because today, we have in the studio, Max the Myth Buster, otherwise known as Max Richman, president and CEO of our very own National Committee to Preserve Social Security and Medicare. Hello, Max.

GUEST:  Hello, Walter.

HOST:  How are you doing?

GUEST:  I’m doing just great.

HOST:  Thanks for joining us, Max. And we’re kind of excited because, well, you don’t have a cape, you can’t fly, but you are the myth-busting superhero. Is that a title you’re willing to accept?

GUEST:  Well, that’s very flattering, but I’ll accept it. It’s important that the myths be put to bed, and the myths be dispelled, because the more people that accept these as fact, the support for the programs will be undermined. That’s why I’ve been busting these myths all over the country for the past year, as best I can.

HOST:  So Max, there are so many different myths about Social Security that we’re going to break this into two episodes of the podcast. So we’ll tackle some of them today, and the rest of them next time. But I want to cut right to the biggest myth of all, that Social Security is going broke or bankrupt. Why is that a myth?

GUEST:  You’re right. That’s probably one of the most pernicious, dangerous myths of them all. It’s a myth because it’s false. Social Security has solvency issues that need to be addressed. We know that the program trust fund will run out of money in about 10 or 11 years. At that point, if Congress does nothing, benefits will be reduced to about 80% of what they ought to be.

HOST:  Right.

GUEST:  That is a serious problem.

HOST:  Yes.

GUEST:  I don’t think any member of Congress is going to want to go back home and say, yeah, your benefits are going to be cut by 20%. So it’s not going to happen. There will be some change to make sure that doesn’t happen. But Walter, the difference between having a benefit reduced by 20% and having a benefit reduced to zero is big. And when people hear the term ‘bankrupt, broke, the program won’t be there,’ that’s a very different perception than having a shortfall that is serious, that is big, that needs to be addressed. But it’s not a bankrupt. Walter, the only way Social Security can be, quote, bankrupt is if we have 100% unemployment in this country and nobody is paying into the program.

HOST:  Which is never going to happen.

GUEST:  That is never going to happen. It’s outrageous. And I am so disturbed when I hear otherwise, I think responsible members of Congress repeat that myth that the program will be bankrupt.

HOST:  Not only members of Congress, but the media say that. The mainstream media, well, “Social Security is going broke.”

GUEST:  We need to dispel that myth. And we need to do it over and over and over again until we change that perception.

HOST:  Agree. So one of the other tenacious and pernicious myths is that politicians are stealing from Social Security. Shahab, our engineer and digital media manager, does the social media. He could tell you, too, all of our social media commenters, not all of them, some of our social media commenters will constantly reply, “Well, they’re stealing from Social Security. So that’s the solution to fix it. Stop them from stealing.” Talk about this myth, because it’s kind of crazy.

GUEST:  Well, it is kind of crazy. And it’s it’s a little complicated, sometimes difficult to explain. But the way the program works is: payroll taxes come in, what is excess beyond what is needed to pay benefits at that moment are put into an account. It’s called the trust fund. It’s like a savings account that earns interest. Now it is almost three trillion dollars at this point. I think 2.8, a little over 2.8 trillion.

HOST:  That’s the balance in the trust fund. That’s a positive 2.8 trillion dollars.

GUEST:  Now, Walter, if you had 2.8 trillion dollars, you wouldn’t want it under your mattress. Maybe you would, but most people understand that this money should be invested.

HOST:  Right.

GUEST:  It earns interest, which is the way it works. It’s invested in what? Government bonds. The safest investment, maybe not the best return, maybe not the highest interest rate, but you know you’re gonna have your money, right? So the money is invested in Treasury bills.

HOST:  100% backed by the federal government, by the full faith and credit of the U.S. government.

GUEST:  Absolutely. And so in that sense, the money is used because it’s not in a vault, as, if you remember, President Bush went to somewhere in West Virginia and opened a vault and there was no money there, just a bunch of IOUs.

HOST:  Almost as bad as Geraldo looking for Capone’s vault.

GUEST:  Almost. But that’s the way the program works. So that is sometimes interpreted as the money is being used by politicians.

HOST:  Or stolen.  As far as you know, has any president or member of Congress actually misappropriated Social Security funds or taken them improperly for something else, for some other purpose?

GUEST:  No. The program works just as I’ve explained. There’s no cash. The money’s invested just as any government bonds are invested and that money is used for whatever purpose the government decides. But the money is backed, as you pointed out, by the full faith and credit of the U.S. government. It earns interest, goes back into the trust fund.

HOST:  It seems like no matter how many times we say that, people don’t believe us. So I guess we just got to keep saying it. Another popular myth that people keep repeating on social media is that undocumented workers are collecting Social Security. Can you knock that one down for us, Max?

GUEST:  Another very misleading and discouraging myth that is out there. Absolutely false. Undocumented workers sometimes get a phony number, a phony Social Security number, in order to get employment. They pay payroll taxes with that number.

HOST:  Like everybody else.

GUEST:  Their employer pays payroll taxes. But when it comes to collecting, they can’t collect because they don’t have a legitimate number. So it’s just really the opposite, Walter. In fact, a Social Security Actuary’s report a number of years ago pointed out that that particular year there was a net benefit to Social Security’s account by about 12 billion dollars, which means that people paid in, employers, employees paid in, because of the use of an illegitimate number, a Social Security number. But the collection was impossible.

HOST:  So just to make it clear to the listeners, undocumented workers might pay into Social Security, but they cannot collect benefits. And you said that in that particular year, undocumented workers contributions added 12 billion dollars to the Social Security trust fund. And finally, the myth that is maybe the most harmful, because it plays into the false narrative that Social Security is somehow a bad deal for younger adults. This myth said Social Security won’t be there when today’s young people retire.

GUEST:  Right. Unfortunately, there are a lot of young people that have bought into this myth. And I know there have been some surveys and studies in the past that younger people believe there were more likely to ever see a UFO than to ever get a Social Security check. That’s not true. As we as we just talked about earlier, the program needs some corrections, some modifications, so that it is sound and solvent and able to pay full benefits beyond the next 10 or 11 years, and that that is something that I think is incumbent upon the Congress and the White House to to solve and to address.

HOST:  But that doesn’t mean it’s not going to be there, that the whole program is not going to evaporate.

GUEST:  It’s not going to be there and also what I like to tell younger audiences that come to our town hall meetings or listen to this podcast – it’s there for you right now.

HOST:  That’s right.

GUEST: If you are, as an example — and I use this frequently — a 27-year-old worker with a spouse and two children, you have right now, never mind what happens when you retire, you have right now about two million dollars in value in life and disability insurance in case something bad happens to that wage earner, dies young or becomes disabled. There are benefits for survivors, spouses, children. Millions of children get by in life because Social Security is there for them when they had a working parent, who became disabled or died young. So not only is it going to be there for you in the future, but it’s there for you right now.

HOST:  I wish more younger adults realized that, but again, we just got to keep telling them. And you were mentioning surveys. A Gallup poll from late 2023 said that 50% of non-retirees believe Social Security will be there by the time they retire, but 47% do not think Social Security will be there when they retire. And this is interesting, millennials as a generation are less optimistic about receiving Social Security than the younger Generation Z members. So we got to keep speaking to millennials like Shahab and say: believe us, Social Security will be there for you.

GUEST:  Well, you know, Shahab, people in your age group start to accept these myths as facts. When the policymakers and legislature say: I’ve got a better deal for you. You can have this money instead of paying payroll tax, you’re gonna be more interested in accepting that bad deal.

HOST:  And I think that leads us to our final question, which is how do the so-called fiscal conservatives in the think tank environment and in Congress, how do they use these myths to try to cut Social Security or undermine it, because they don’t come from nowhere and they don’t perpetuate themselves for no reason.

GUEST:  Well, they find it useful in pursuing their agenda, whether it’s privatizing the program or reducing benefits, and there seems to me sometimes their goal is. I’m not questioning their motives, I’m just questioning their judgment. And that judgment says: you’d be better off on your own rather than having a program that everybody participates in — virtually everybody. Everybody benefits from it: younger people, older people, and the disabled. You’d be better off without this program and take care of yourself and and do your own, take care of your own investment and good luck to you. And I’m not even sure about the good luck part sometimes.

HOST:  Yes, that’s one of your catchphrases and we do love that one. What you’re saying is: are you trying to say, Max Richman, that in 2024, facts actually matter?

GUEST:  Absolutely Walter, you know that that’s important to me, it’s important to the program and it’s important to the listeners of this podcast.

HOST: This podcast… Well, the more they listen, the more facts they will get. And if, by chance, Shahab or I see a UFO before we get a Social Security check, you’ll be the first one to know.

GUEST: You know, or Bigfoot, that’s the other.

HOST:  or Bigfoot.

GUEST:  You’re more likely to see Bigfoot.

HOST:  I was wondering why you left Bigfoot out, and maybe it’s because he’s an older myth and UFOs are are now all the rage again. I don’t know. But anyway, thank you, Max, so much.

GUEST:  Thank you, Walter.

HOST:  Of course, there are several more myths for us to debunk, but we’re out of time for today, so we’re inviting Max to come back again and tell us the real deal on those on another episode of You Earned This! And if you’d like to join our quest to bust myths and boost Social Security and Medicare, become a member today. Visit ncpssm.org and click join us. That’s ncpssm.org. Our wonderful engineer is Shahab Shokouhi. Our fantabulous editor is Simon Laslo-Janssen, and I’m Walter Gottlieb reminding you that you earned this.