10 June 2005

A Thought on Social Security

In case it hasn't smacked you in the face, my modus operandi is to look at the headlines (usually on Drudge) and come up with some sort of commentary on them. This post is no exception.

The Washington Post relayed an AP Story which relays that Republicans in the Senate are considering raising the social security retirement age.

And... it's about time. As much as I would love to retire at age 62 or 65, or whatever it is these days, with full social security benefits, it just isn't right. Yes, 40 years is a long time to work. But the point of social security is to take care of those who cannot take care of themselves, not create an entire caste of elderly citizens who live on the government dollar for, and this is pure wild speculation, probably a median of 15 years.

I've heard that when King Franklin I did his New Deal, a significantly smaller percentage of Americans lived to collect these benefits. The President has said that some years ago, 16 working Americans were working to support 1 social security recipient, and that currently every THREE working Americans support one recipient. It is expected that, certainly within my parents' lifetime, one working American will support one non-working recipient of social security.

Senator Hillary, big momma of the destructively socialist HillaryCare program, has said that something like "It's almost as if he's trying to undo the New Deal!" First of all, this is so whiny in its very nature that it's like a small child saying, "It's almost like they're taking away nap time!"

I thought it was apparent to 8th grade graduates (we've yet to see Hillary's elementary school records, so she may be excused from this qualification) that the New Deal was a colossal distractoin that basically put the citizenry to work on government sponsored labor... sort of like conscripted labor. FDR just threw out a hundred different organizations, created an ugly bureaucracy, and every President since has been trying to untangle the knot he made!

Social security should remain a system to ensure the security of a way of life for those who cannot secure it for themselves. It is not a government sponsored method for retiring well before your working years are behind you. This becomes apparent when you notice that certain disabilities merit collection of social security.

The people with whom FDR made the new deal worked until they were 55 and then dies. The ones who made it to 60 couldn't work anymore, and so the rest of us agreed to take care of them. At the start of my financial career, I willingly renew this agreement. I do not, however, consent to pay for perfectly able 65 year-old Americans who will be able to play tennis for the next 20 years but expect me to pay for their retirement.

If this sounds cold, go back to 1937 and ask a coal miner what he thinks of the deal. It's a fair deal, it's a good deal, it's an honest deal, and it requires older Americans to keep up their part.

No where in the founding principles of this nation does it say, "It shall be the right of the people to retire at an age determined by previous generations under different standards of longevity and different working conditions."

My parting thought: what if life expectancy doubles in the next 25 years (we vaccinated Marburg, don't doubt modern medicine)? Will we expect Americans age 18-70 to pay for Americans age 71-140?

2 comments:

Brian said...

I agree with you to some extent, my good friend. However, you fail to take into account a few important points. For one, most adults over the age of 65 need to have surgery or "procedures" which will put them out of commission while they recover for the next year. This severely hinders their employability. Also, with the Bush administration's failure to stop outsourcing, we are finding less and less jobs for those people who are older. Personally, it seems to be a better idea to raise the maximum taxable income to $100,000. This would take care of the problem quite easily, and it would not be the poor Americans footing the bill.

If you would like to talk about debacles in public policy, I might have to point to Bush's proposed privatization of Social Security. Not only is it contrary to the point of Social Security, but it is not a feasible plan. Before record deficits became a trend in government (hint: see past four years), it was noted that the American government was the safest place to put away money that would account for the basic needs of those who could not provide for themselves. It was also not just a plan to help older people, but a way to give the government more tax revenue in order to facilitate Government programs designed to spurn economic development without actually raising taxes. What most people do not realize is that the government takes money from Social Security each year to fund a lot of its programs (the stipulation being that it pays back the amount at the end of the year).

Also, it's very important to add that if you speak with people who grew up in the depression, they will tell you that although the New Deal wasn't some miraculous gift-from-God (somehow Republicans seem to find a way to insult FDR for not solving the global depression in the blink of an eye), it was still the best that the government was capable of, and it not only put money in the pockets of the American people, but it put them to work which raised their morale.

I agree that there is a problem here, and I think we need to adjust the system to deal with the ever-changing society in which we live.

I must also rebutt one of the comments that you made towards the end of the post. In no way can you make the argument that you are paying for the retirement of people who are able to play tennis for 20 years. Anyone who is living on Social Security probably cannot even afford a tennis racket. If you doubt that, then by all means please look at the amount of money that people receive for Social Security. Most of the people that actually have to live on this are dual-eligibles -- meaning that they are eligible for both Medicaid and Medicare. These are the neediest in our country, who would probably be dead if not for our tax dollars.

I also don't agree with Hillary's proposed umbrella coverage for Americans. I, like most Republicans, am more concerned with the revenue that the pharmaceutical companies make than the care for those who cannot afford health insurance. I'm sure that someone who reads or writes on this site can understand how children born into poor families might need help in staying alive (i.e. Welfare, Healthcare, Prescription Drugs). I know, it's a sticky situation and it probably means that the quality of healthcare for the rest of us will decrease. However, I wonder if it's worth it to save the lives of millions of people each year. Perhaps a cost-benefit analysis is in order :P

The Aspiring Scholar said...

This one deserves a response. Let me first say what I say to all anonymous posters: you do yourself a disservice by not revealing your identity.

Now then, I'm just going to go through your post and pick out what I don't like about it. First, it isn't the government's responsibility to stop outsourcing. The government should (but is not required to) discourage it, but as long as attitudes like yours prevail, corporations will not be held accountable for sending jobs overseas. (I paranthetically state this because I am not sure I agree with it. However, the above does not take into consideration the idea that other countries need jobs, too. Or the argument that if the Germans can make better Cadillacs for cheaper, why not have German-built Cadillacs? As I say, these arguments hold some water and are more points to consider than real points in my argument.) Staying within your paragraph structure, I agree that taxability should be changed (flat tax, anyone?) but I think it should kick out at it's current level ($70k is it?) and kick back in at a certain level, say $250k-350k.

Next, the President's plan isn't some disastrous misunderstanding of the world as we know it, and it is certainly not an attempt to rob America's proletariat. As I'm sure we're all aware, designating 4% (FOUR percent, that's .04, or 4 dollars for every 100) to a right-to-manage status does not equate to privatizing social security. This is a ridiculous farce foisted on us by the media. This is ALLOWING, not forcing, Americans to manage a small amount of their social security money in the private sector - which can have yields twice those of the social security fund. "Spurn economic development without raising taxes" is some kind of crazy communistic thinking into which you threaten to descend. The economy is strongest when people can spend their own money, not when the government seems to be redistributing wealth. It was a plan to help America's disabled and elderly when FDR installed it, but the gargantuan interest it generated was skimmed off the top every year to fund other programs or check the deficit. It is also prima facie screwy for the government to borrow money from social security to pay it back: if the government is going to have the money by the end of the year, why borrow it? It all has the same owner. But I'm no economist, and maybe these are things money handlers do to make jobs for other money handlers.

Putting people to work was a good idea. No one blames FDR for his new deal - what we don't like is liberals giving him credit for solving the nation's economic woes with his tax-and-spend policies, when in fact it seems natural market forces and the War had a greater impact.

And yes, it is the case that many 70-year old Americans on social security are still capable of working, and in fact some do work in addition to their social security stipend. Some people can work until age 90, some have health complications that bed them at 60. My great-grandparents are on social security, and you are right in saying that it isn't bucketloads of money. But they have a nice place to live, they eat well, and they can buy the things they want. He was a merchant marine - and has a small pension related thereto - and she worked in factories most of her life, supporting their 3 children and taking in their grandchildren throughout the years. They can't afford a swimming pool for the backyard, but they can definitely afford a tennis racket. Maybe they would have been able to afford the swimming pool if 4% of their lifelong hard-earned money had yielded them double market returns; similarly, the very poor might be able to afford the tennis racket - or prescription drugs for their debilitating diseases - with those same returns. The compassion argument works both ways.

You're very sneaky to squeak in universal heatlhcare at the end. Republicans - one of which you claim to be - want to decrease the public dependence on government redistribution, not increase it. We want Americans to be the nation where rugged self-responsibility propels us to even greater heights. You can be sure I would never deny an impoverished family government money to save the life of their baby (although you can be damn sure I would deny them those same dollars to kill the baby before it's born). No one wants people to die, but we also know that we don't want to end up socialised and trapped in a Brave New World setting like some of our peers. A very vague cost-benefit analysis is implicit in all government subsidy discussions. I believe that the benefit of getting Americans to stand on their own two feet - not by cutting them off completely, but by teaching generations and groups to undo the damage that has already been done - that the nation will be able to maintain its independence, which means more than just the right to have sex with whomever you want. It means freedom from need, especially those that mean our populace will be dependent on the government. This is an unacceptable enslavement that any reasonable American will resist.

Michelle Malkin