Friday, December 17, 2004


Social Security Reform.

Alright, I'm not going to talk at length about the issue. You think I want to bore you? This is Garfield Ridge, not Frontline.

That said, given all the coverage President Bush's proposal is getting, I figure I'll pony up a few cents for the kitty.

As I see it, we have four options to "save" Social Security for my generation's retirement:
1. Keep the current system. Raise taxes to pay for it.
2. Keep the current system. Cut benefits.
3. Privatize part of the system to reduce costs. Pay it off with debt now.
4. Junk the system and start over.

Personally, my favorite option is #4, but it's one that would never get chosen.

Do I believe there is a moral obligation for Americans, through government-levied taxation, to provide for the retirement of poor Americans? Yes, I do.

Do I believe the same is true to provide for the retirement of able-bodied Americans? Hell no, I do not.

Let's just cut out the middleman, and compromise here: the poorest American retirees get normal coverage, on a sliding scale. Everyone else-- the vast majority of retirees-- are on their own to save for retirement.

Now, that latter part can still have a government component, i.e., personal retirement accounts. If people want to save & invest through Uncle Sam, fine. If they want to save & invest through T. Row Price, fine. Fundamentally, it should be a personal choice.

This all reminds me of the Grandpa Simpson quote:

Marge: "Where'd you get all the money?"
Grampa: "The government. I didn't earn it, I don't need it, but if they miss one payment I'll raise hell!"
Why charge me so much so I can pay for someone else's retirement, especially when the system will only become insolvent before I ever see a dime?

Even worse, maintaining that system will actually harm America. One only need look at the European and Japanese social welfare systems to see what happens when fewer people support significantly more retirees with their tax dollars. Economies stagnate, sometimes drastically. Ambition and innovation atrophy.

All the scare-mongering about the market is shortsighted. For example, even in the worst years of recent decline, I still made money on my Thrift Savings Plan. A balanced investment, spread out across not only the stock market but bonds and foreign investments as well, provides even the unluckiest investor a better rate of return than the COLA's seen in Social Security.

Oh, sure; if there's a depression, and the market drops into the shitter, a privatized Social Security system is up the proverbial creek.

But you know what? So is a regular, status-quo Social Security system in such an event. Any stock market crash big enough to hurt a privatized Social Security would kill tax revenues along with it, meaning that either way, the government has to raise taxes, or borrow more.

So, we're faced with a dilemma: stay in the car as it drives off the cliff, hoping you can steer down the side of the mountain; or risk the injury by jumping out of the moving car.

Not a pleasant choice, but it's one that simply must be made.

Never mind all that, however; the AARP lobby has spoken, and they've decided to speak for me, someone at least thirty-five years out from retirement.

Uh, thanks, but no thanks. Just let me have my own money, and clear the way. Give me 35 years to invest even half the money I pay into Social Security, and I'll be retired in the Caymans, I guarantee it.

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