Earlier today, I got an email from the Social Security Administration (SSA) reminding me to review my Social Security Statement. It said the statement had important information, including “estimates of your future benefits.”
At least they didn’t tell me to review my account. They only asked me to review my statement, with estimates of my future benefits.
Why is this so curious? Uncle Sam speaks with a forked tongue.
The U.S. Government does not include debt owed on securities issued to the Social Security “Trust” Fund among the liabilities on its overall balance sheet. Nor does it include the much higher ($15 trillion+) hole in the net present value of future Social Security receipts and payments.
In past public testimony, officials have stated that program obligations do not meet the government’s definition of a liability, given that the government controls the law and can change it any time.
But in 2017, the SSA introduced a new website enabling people to sign in and see their statements. The front page of the website delivered a deceptive message to the public.
It said “Set yourself free,” in big letters, followed by “Open a my Social Security account today and rest easy knowing that you are in control of your future.”
But the government also says that those estimated benefits are not debts of the government, given that the government controls the law!
After I wrote of the troubling implications of this messaging in late 2017, the SSA took that front page down and replaced it with a kinder, gentler front page.
But this morning’s reminder from the SSA prompted me to go look at the SSA website again. The new one up there has taken some of that older, less-than-consistent messaging.
The main image on the front page has text that reads “Putting you in control … Learn what you can do online.” Near the bottom of the front page, there is a link to the “my Social Security” page, like the one with the past deceptive message. The text below that link says it helps us to “Check out your Social Security Statement, change your address, and manage your benefits online today.”
Things are moving into deeper, more treacherous waters again.
If it is “my Social Security,” and the government says you can “manage your benefits,” aren’t those obligations of the Government?
In turn, clicking on that “my Social Security” link, it takes you to a page that says you can “create your personal my Social Security account today.”
So these aren’t just “estimated benefits.” I apparently have an “account.”
An account of what? Something the Government doesn’t believe it owes me?
In the recently released President’s Budget for FY 2020, the “Analytical Perspectives” document includes language in Chapter 4 (Federal Borrowing and Debt) that clues us in on the nature of Uncle Sam’s ambiguous promises.
At the outset of the chapter, we are told that “Debt is the largest legally and contractually binding obligation of the Federal Government.”
That sounds like a firm commitment, and a liability, right? What is this “debt” stuff?
There are two main types, according to the ensuing discussion. The first paragraph of this section introduces the “debt held by the public” (which curiously includes securities held by the Federal Reserve System, but let’s put that aside for now). The next paragraph begins “In addition, at the end of 2018, the Department of the Treasury had issued $5,713 billion of debt to Government accounts.”
It sounds like that $5.7 trillion is debt, and therefore a legally and contractually binding obligation of the government, doesn’t it?
Then, the chapter starts splitting the hairs. We get an explanation, consistent with past administrations, that this latter class of legally and contractually binding obligations are effectively obligations of the government to itself:
However, issuing debt to Government accounts does not have any of the credit market effects of borrowing from the public. It is an internal transaction of the Government, made between two accounts that are both within the Government itself.
So much for my Social Security account. So much for taking control of my future.
In 2014, Jacob Soll penned a wonderful book titled “The Reckoning: Financial Accountability and the Rise and Fall of Nations.” In the introduction, Soll tells the story of Louis XIV, King of France in the mid-to-late 1600s. Louis carried his kingdom’s account books on his person, books that were prepared twice a year.
Until the red ink, and bad news, became too heavy to bear. Soll stated that “If good accounting meant facing the truth when the truth was bad, Louis, it seemed, now preferred ignorance.”
Speaking those famous words, “l’Etat c’est moi,” he apparently meant it. No longer would a functioning state interfere with his personal will.
Speaking of “my Social Security Account,” and the importance of accounting in securing accountability in a republic like ours, that French phrase translates to “The State is Me.”