Would you trust a government that is $34 trillion in debt to manage your retirement more than yourself? More importantly, is it the role of the government to manage people’s finances? Since its creation in 1935 under FDR’s New Deal, Social Security has grown into one of the largest federal programs, costing $1.35 trillion and representing 22% of the budget in 2023 (USAFacts). While politicians praise Social Security, they often ignore the fact that it requires coercion, denying individuals the freedom to manage their retirement, limiting prosperity, overstepping the government’s role, and violating personal liberty.
Social Security was established through the Social Security Act of 1935 as a safety net for retirees (History). The Social Security payroll tax took effect in 1937 and the first payments were issued in 1940 (Social Security Administration, “Historical Questions”). The system is compulsory, with workers required to contribute their wages with the promise that they will be saved for retirement.
In 1937, the constitutionality of Social Security was upheld by the Supreme Court in Helvering v. Davis, determined to be a proper usage of the General Welfare Clause of the Constitution (Justia). However, the General Welfare Clause was never originally understood as authorizing government action simply for what politicians deemed to be for society’s “general welfare” (Somin). Instead, it was understood as a limitation on government. In a letter to a colleague, James Madison wrote, “If Congress can do whatever in their discretion can be done by money, and will promote the General Welfare, the government is no longer a limited one possessing enumerated powers, but an indefinite one subject to particular exceptions” (National Archives). The government can tax the wages of the people to provide services like law and order under the Constitution, but the argument for Social Security suggests that people are unable to make intelligent decisions with their money and that this thus requires a nanny state. This was clearly not what our Founding Fathers envisioned when they sought to limit government intrusion into daily lives. Thus, the argument that the General Welfare Clause permits the government to make financial decisions on behalf of the people is incorrect.
Social Security is sustained through a federal payroll tax. Taxes are automatically deducted from workers’ wages without their direct consent. The tax currently stands at a rate of 12.4% split between employers and employees (IRS), along with a rising limit on earnings subject to tax (Peter G. Peterson Foundation). For a person who retired in 2020 at age 65 after earning average wage, this would amount to over $300,000 taken by the state throughout their lifetime (Free Facts). Their return? Less than 5 percent. Meanwhile, the average return rate of the S&P 500 is more than double, at 10 percent (Investopedia). When President Bush unveiled his plan for partial privatization of Social Security in 2005, resulting in widespread outcry, the S&P 500 stood at 1,254 points (Yahoo Finance). Earlier in 2025, it peaked at over 6,000 points. Had individuals been able to invest their money in the S&P 500 in 2005, their returns would have quadrupled.
Instead of allowing people to control their own money, the government forces them into a system where current contributions pay for current beneficiaries, with the promise that future workers will fund their retirement. Is this not a Ponzi scheme? Unlike private investments, where individuals control where their money goes, Social Security depends on perpetual new contributions to stay afloat. The government mandates that individuals funnel their money to the state instead of allowing them to invest where they would receive better returns. The individual has no say. The politician has all of the say.
As a result of this decades-long system built on coercion, numerous consequences have emerged. First, the government has greatly expanded. Social Security alone accounts for over $1 trillion in annual federal expenditures, and the Social Security Administration employs nearly 60,000 employees (Social Security Administration, 2025). The justification for Social Security has been used to justify other expansions of government, such as its increasing role in education and Obamacare. Second, the program provides poor returns for retirees. Social Security was meant to benefit retirees, yet the average return is significantly less than what is available through the stock market. Third, there is Social Security’s uncertain future. The trust fund is projected to be depleted by 2034, which will lead to an automatic 20% reduction in benefits (Center on Budget and Policy Priorities). After this, Social Security will remain reliant solely on payroll taxes. However, as the population ages and the workforce shrinks, there will no longer be enough workers to sustain the program. In 1945, 42 workers sustained one beneficiary (Social Security Administration, “Worker-to-Beneficiary Ratios”). Today, less than three workers sustain a single beneficiary. As a result of this grim future, public trust in Social Security has fallen. A recent survey found that nearly half of Generation Z believed Social Security would run out during their lifetime (Malito). Finally, and most importantly, the government’s mandate to participate in this program with weak returns and a stormy future has violated the financial autonomy and liberty of every U.S. citizen. Individuals are not allowed to decide for themselves.
In conclusion, Social Security is a program rooted in coercion that contradicts the Constitution’s values of limited government. Thomas Jefferson once wrote, “The natural progress of things is for liberty to yield and government to gain ground.” Accordingly, Social Security has denied individuals financial freedom and gains while government has only expanded. How do we reclaim our liberty? We must re-establish the original premise of the General Welfare Clause. Instead of mandating Social Security, the government should honor the people’s right to make their own decisions and offer an opt-in choice. The people should have financial autonomy, and therefore, success or failure should depend on their own decisions, not the government’s.
