Academic

MEGAN MCARDLE: HOW SHOULD THE U.S. BREAK ITS PROMISES? The first thing to point out is that lega?

By Glenn Reynolds

MEGAN MCARDLE: HOW SHOULD THE U.S. BREAK ITS PROMISES?

The first thing to point out is that legally, changing social security benefits would not be default, because (as the Supreme Court has already ruled), beneficiaries have no legal, contractual right to their benefits. They enjoy them at the sufferance of Congress, and Congress has the perfect right to change them.

Yes People who buy Treasury bonds are known as creditors. People who rely on the government’s Social Security promises are more like . . . suckers.

UPDATE: Reader Betsy Gorisch emails: “Considering how GM’s bondholders were treated, maybe it’s possible that creditors, as well as those relying on Social Security’s promises, could also be known as suckers.”

ANOTHER UPDATE: Reader Mike Kozlowski writes:

As a retired member of the US Air Force (1978-98), I remember quite vividly when the Clinton Administration told us in the mid-90s that we had no entitlement to lifetime medical care upon retirement and that our dependents had no right to that either, no matter what the recruiters had said for nearly half a century. We were told at the time that everyone was really sorry about this but that there really was no choice, that we’d have to sacrifice for the greater good. We do get medical care, but we have to pay for it now, out of our retirement checks.

I have a feeling that a lot more people are going to find out what it’s like when Congress decides what you’ve been told all these years isn’t true any more.

One way or another, a promise is worth exactly as much as it costs the promise-maker to break it, and no more.

Full post as published by Instapundit.com on February 02, 2011 (boomark / email).