Why Save Social Security?
Demographics are driving us toward a financial cliff. As our Social Security shortfalls approach, politicians are starting to dance around the 3rd rail of American politics. People are asking, “How do we save Social Security?” Maybe the question should be, “Why should we save Social Security?”
Social Security was a product of the Great Depression. The goal of Social Security was to protect seniors from extreme poverty. At the time, there were very few safeguards against devastating poverty. That is no longer true. Welfare has become much more politically acceptable.
When Social Security was initiated, there were many more workers per recipient. As science advances and lives are extended, there are fewer workers to support seniors. Longer lives and a demographic crisis (Baby Boom) have taken us to the financial cliff.
Our current system collects payroll taxes on the first $102,000. Some politicians are suggesting that the limit either be raised or eliminated. Even some rich people are suggesting that the limit should be removed. Warren Buffet for one is making this suggestion. If we forget for a second that Warren Buffet makes a ton of money on financial planning...planning that helps you avoid the taxes he is advocating...we should at least admit that this would fundamentally change Social Security from a government mandated retirement plan to a welfare plan designed to transfer wealth from the successful working class to poor seniors.
If you believe such a system is just, then you should at least have the guts to come out and admit that we no longer need Social Security. Have the guts to call it what it is...WELFARE.
One of the great flaws of Social Security is that the money is not invested or saved. This is fortunate. If the government were to invest Social Security funds into stocks and bonds as Bill Clinton once suggested, the power of the federal government would be dramatically increased and those investments would ultimately be poorly managed. This idea was so poorly thought out that it never made it past a mention in a State of the Union address.
Saving the money in a “lock box” as Al Gore suggested would be even worse. Imagine taking trillions of dollars out of the economy each year and putting it in a vault somewhere. The economy would collapse.
The best alternative is to have the social security money invested. The only way to have that money invested without giving unimaginable power to the feds is to have individuals invest their own money. This would insure that the money is not removed from the economy and would disperse the power that comes with that money.
The big conflict between the parties comes down to a fundamental difference in world views. Do you believe that elites in Washington are better decisions makers than the nation as a whole? What are the consequences of bad decisions? The idea that a few big-brained individuals in Washington are superior to the thinking power of the collective brain of hundreds of millions is dubious. But more to the point, we all suffer if those few elites make mistakes. The question should not be, “Will some Americans poorly invest their income?” The question should be, “Who should pay the price of the poor investments?”
Our current Social Security system will make younger Americans pay the price for our father's poor choices...and that is wrong. Social Security needs to be scrapped for a better system.
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