This month the federal government begins an orchestrated and systematic attempt to deceive the American people. So what's different about this month than any other month, you ask? The government's putting it in writing.
On Oct. 1, the Social Security Administration began sending out the first batch of statements informing 125 million working Americans how much they have paid so far in payroll taxes, which covers both Social Security and Medicare, and how much they can expect to get back.
In 1989, Congress passed a law requiring these mailings annually, which will also include estimates of monthly disability and survivor benefits. The amount of money that workers paid in will likely be correct; it's the amount they can expect to get back that's deceptive.
Sending Americans these statements on an annual basis will lead many people to think they actually have an account with real money in it or real assets behind it. That's what people think when they get a statement from their bank.
This is Social Security's dirty little secret: There is no money in those Social Security accounts, because Social Security operates on a pay-as-you-go basis. Money workers pay in is used to pay current retirees' benefits. And while there has been a surplus for the last several years - workers are paying in more than is needed to pay current benefits - the federal government has been borrowing that money to pay other bills.
Perhaps the worst part about these statements is that they don't compare how much Social Security says you will get against how much you could have received at retirement had you been able to put that money in a personal retirement account.
Fortunately, the private sector is supplying that information. Both the Cato Institute (cato.org) and the National Center for Policy Analysis (ncpa.org) have Social Security calculators on their Web sites that will let people compare what they can expect to retire on under Social Security vs. a private retirement account.
For example, according to the Cato Institute's calculator, a person making $45,000 annually could expect to retire with $898 per month income from Social Security, $2,882 a month from investing personal retirement account money in a mixed stocks and bonds) fund, or $5,547 a month from investing in a stock fund.
Until Americans have a retirement system that represents real money in personal accounts, the best use of these annual statements will be to look at your returns from Social Security. Then think about how much you could be making if politicians would create a private retirement system - and look forward to the next election.
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