Saturday, March 26, 2005

unsociable security

Much has been written about the potential changes to social security. I'm not going to write about what should be done. Rather, I'm going to write about some of the background around the issue. Why? Two simple reasons. First, the arguments are heated on both sides and I don't care to get involved and second, I feel there are some basic arguments that are being ignored.

So for the first backgound, we need to pay a visit back in time to the creation of Social Security. At that time, social security was designed to pay retirees (old folks) a basic amount of money for basic living. Today, it does that. Social security provides retirees with enough income to survive and not much more. You may argue that it should provide more, that will be covered later (see final shot number one at conservatives below).

The second background item is that social security provides for all Americans. There is no ability to choose retirees who will die earlier, so the payouts for some people continue for a long time.

Regarding projected changes, some are suggesting private accounts. Others are suggesting changes to the existing system. I won't suggest that either one is better than the other. Rather, I will suggest that proponents of private accounts are ignoring one simple fact. The proposed changes ON AVERAGE will involve the same tax increases and/or payout cuts as the changes to the existing system. There is a limited amount of money in the system. This money is created by the people paying into the system. This money can either be saved (invested) or paid out. At the rate things are going, less money will be available. With private accounts, some people will receive less than they would under the traditional plan and some people will pay in more. I'm not suggesting that this imbalance is unfair. In contrast, it is probably more fair than the traditional system. All I'm saying is that the both plans will involve increased taxes and decreased payouts.

This brings up my next point. Notice that I called social security payments taxes? That's what they are, taxes. Had this great nation realized my extreme intelligence and made me king, I would have erased the line between taxes and social security a long time ago. (Actually, I wouldn't, but that's immaterial). Social security is nothing more than a tax to help retirees. The only difference is, the way it is managed now, it creates an expectation of a payout at a later date. This expectation creates problems (see next paragraph).

Now, I referenced some parting shots at conservatives. Let me first note that I consider myself a conservative. I vote for conservative causes. I believe that the government which governs the least, governs the best (a quote often attributed to Thomas Jefferson, I've heard it's someone else). My biggest complaint about most government programs is that they create an expectation. Welfare (at least reportedly) creates women who have babies just to get welfare payments. Everyone expects the government to pay them. After all, if the government doesn't take care of them, who will?

The problem I have with conservatives (parting shot #1) is that, by promoting private accounts, they have succumbed to this same mentality. All the arguments about private accounts compare how much social security pays out versus how much we could get in private accounts. Isn't this an entitlement mentality? Isn't this a way of saying that "I'm owed a certain amount of what I put in"?

My second and final parting shot on conservatives is to ask, where is the care? I have heard nothing in the private account plans that would indicate there is anything that would provide for the less fortunate. As mentioned earlier, the total payouts will only increase if total payins increase. Some people can't (or won't) manage the private accounts. How will these people be taken care of? As a conservative, part of me says to "let them eat cake." But, as a Christian, I have to make sure that the less fortunate are cared for.

So, what is the solution? I don't know. I'm willing to listen to ideas than answer that question and I'm willing to listen to comments contrary to my ideas above. I'll read any comments posted here.

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