Comments
by Scoper...
PAVED WITH GOOD INTENTIONS
The first people to get excited about
Social Security are pretty much all dead now. But the depression-era program
goes on and on, removing major chunks of wages from the paychecks of those
who are working, and redistributing relatively modest sums to those who
are retired. Where's the rest? The people extending us this kindness deserve
a cut, don't they? But there are Lies, Damned Lies, and Social Security.
The last was a lie from day one.
Like the system itself, the lie started
small, then grew over the decades into such a behemoth that "Social Security
reform" is a major issue in the 2000 presidential race. Here's what the
government told us in 1936: starting in 1940, workers and their employers
would each pay a penny and a half on each dollar earned, up to $3000 a
year. This was to rise to 2 cents in 1943, and finally 3 cents (each from
employer and employee) in 1949. That was the MOST (in the government's
own words) that anyone was EVER to have paid. That was the first big lie.
How big? The above figures would
have resulted in a top Social Security tax today of $90. Now it's more
than $6000. Sure, there's been inflation, but more than SIX THOUSAND PERCENT?
No, that would be post World War I Germany (which led to the rise of a
Nazi regime that that thrived on - guess what? - big lies.)
The second big lie was that the government
would set up a special Social Security account for each eligible citizen,
and that the checks would come to them as a right. Many people still believe
this, and why shouldn't they? Few politicians want to tell them the truth:
that there is no trust fund - in the sense that it's your property - and
that today's benefits are being paid from today's contributions.
There's an account in your name,
but that doesn't mean there's money in that account. Check your Constitution,
check your Federal Code, check related Supreme Court rulings: you have
no "contractual right" to your government retirement check.
There's also nothing to stop the
government from dumping Social Security contributions into the general
fund, spending it on whatever is expedient, or even using it to claim a
smaller federal deficit. This has been happening for years.
I'm not trying to scare anyone (or
myself: I don't turn 65 until 2024,) nor do I see the utter collapse of
the S.S. system in the next few years. What I DO see is an increase in
the problems that have plagued it for much of my adult life, problems that
won't go away because they were BUILT INTO the system.
First, it's totally open-ended. Nobody
in the 1930's could have foreseen that people would live so long today.
Back then, if you made it to age 65 at all, you were doing well. Most beneficiaries
drew checks for a very few years. Today, literally millions are making
it into their 80's and 90's. I salute these folks, but they've been drawing
checks for 15, 20 and 25 years. They'd have exhausted a "trust fund" long
ago, but the government doesn't dare admit to that (because it doesn't
dare admit that there is no trust fund), so the checks keep coming.
It would be fiscally prudent to put
eligibility for benefits on a "sliding scale" based on current and projected
life expectancy. (In other words, as we live longer and longer, make the
eligibility later and later.) But the government can't do that either.
Retirees, voting as a bloc, are a powerful political force. And they're
not greedy; they just want what they were promised. So, the workers' contributions
to Social Security keep rising, now creeping up toward a hundred-fold more
than we were told we would ever pay, and the program is still not out of
trouble.
Ah, but there's a bright star on
the horizon. It's called "privatization." Let people take some of their
Social Security "contributions" (call it a tax: it's mandatory) and put
them into private sector investments, which are doing far, far better than
government bonds. Eventually, let people "opt out" of the system entirely
and take care of themselves, while allowing those currently drawing benefits
to continue receiving them.
Politicians will tell you this is
a horrible idea, verbally painting pictures of grandma out on the street,
or sitting in a tiny, dingy apartment eating dog food. If you think that's
a little loopy, you're gonna love this:
Twelve years ago, Congress created
the "Thrift Savings Plan" for ITSELF and other federal workers, (but not
for you and me, for some reason.) Those eligible can invest up to 10 percent
of their salaries into one of three retirement funds: government bonds,
corporate bonds, and the stock market. The last had a 20 percent return
in 1999 alone. If Social Security is so wonderful, how come they get to
do this, but we don't?
Because then they'd have to admit
it's all a Big Lie.
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