Your Opinion: What is the true cost of US welfare?

Dear Editor:

In a previous Opinion I noted that Social Security is funded by forced worker contributions, as opposed to Medicaid, which is one of government's many welfare programs. There is a similarity between Social Security, Medicare and Medicaid, all of them fall into the category of government mandated income redistribution plans. The difference between the three is that at least with Social Security and Medicare recipients have made some level of contribution to the plans prior to receiving benefits.

The following figures were generated with Social Security's Quick Benefit Calculator. They are all based on a self-employed person who was born 7/1/1951 and who chooses to retire 6/2017.

In Case 1 the person contributed to Social Security for 15 years. Starting salary in 2003 was $10,000, ending salary in 2017 was $20,000. That person would have contributed $26,900 to the Social Security Trust Fund. The person would qualify for a monthly benefit of $459.

In Case 2 the person also contributed to Social Security for the same 15 years. Starting salary in 2003 was $59,700, ending salary in 2017 was $120,000. That person would have contributed $161,384 to the Trust Fund, six times the contribution made by the person in Case 1. The person would qualify for a monthly benefit of $1,456, only 3.2 times the benefit received by the person in Case 1.

The Case 1 person would have paid $6,290 into Medicare's Hospital Insurance program. The Case 2 person would have paid $37,744 into the program. Both would receive exactly the same benefits even though the Case 2 person paid six times as much into the program.

I am not making a judgment on either of these programs. I am merely pointing out that these are two of the many federal government's "hidden" income redistribution schemes. We have no clue about the true cost of welfare in our nation.

 

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