We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
As I noted in a recent National Review column on why Social Security reform has proved so difficult, shifting from a pay-as-you-go program to a funded system entails significant “transition costs,” which are borne by the very citizens who would decide to make the change. Since today’s Social Security, Medicare, and Medicaid benefits are paid from today’s taxes, if we decide to pre-fund these programs then the current generation must pay twice: first for current beneficiaries, and second for their own benefits. Put simply, to shift from an unfunded program to a funded program, someone must contribute extra funds. When the defining characteristic of domestic policy has been for voters to shift their own cost burdens to future generations, it is highly optimistic to expect current voters to accept a double burden. The expected result is to kick the can down the road, such that deficits grow and future taxpayers become even worse off. My own take: it was the transition costs associated with Social Security personal accounts, more than the risk of investing Social Security taxes in stocks, that doomed President Bush’s 2005 reform drive to failure.
Read the whole thing, because it is the best explanation I have seen. I do understand that pols seem to want to keep their big shot jobs in DC, but, in the process, China will ending up owning us.
By the way, I would like my lifetime net Social Security contributions as a lump sum, please, at age 65. That's all I ask for. You can even ignore inflation, so it's been my free long-term loan to you, Uncle Sam. It is my account, right? Just hand it over, and I won't give you any more trouble. I'll use it to pay off my mortgage, and live happily ever after...
I've often wondered, if the social security program had been funded as originally conceived with money put into a "bank account" earning interest and we didn't add disability and all the other crap that's been taken out. What would be the financial status. Would we be in the black?
If Social Security had gone to something like a Dow 500 or a Dow 50 index fund, we'd all have a stake in the success of American industry and business. We'd have learned that those who want to shaft "the rich" are really going to shaft everyone (which was always true).
But Social Security's core concept is wrong, wrong, wrong. Not the Ponzi scheme, although that's bad. Not the investment portfolio, although that's bad. It's the idea that any level of government can compel us to "save for retirement". Instead, by skimming our pay, the government has left us with almost no way to save for ourselves. My budget doesn't seem to have another 12% slack for a retirement fund. Or, actually, 6% -- I'm at 6% to a 401k.
Any method to correct Social Security's many ills will be painful, like having a hernia repair. Not correcting it will, in the end, be worse. And I'm one of the sandwich gang that is about to be eaten.