A subject that has recently become near and dear to my heart...
What many people don’t realize about Social Security is that the money that a worker pays toward the program is not held in an account for that worker; rather, that money is put toward the Social Security checks received by current retirees. Therein lies the problem. When the program began in 1935, there were sixteen workers to every retiree. This kind of ratio requires only a small portion of each worker’s paycheck in order to support the retirees of the country. But it didn’t last. A steady rise in standard of living coupled with a vast number of medical advances have increased the life expectancy a great deal in the past sixty years, and the ratio has now been reduced to about two and a half workers to support every retiree. This means that in order for the average retiree to maintain the same lifestyle after retirement, the average worker would have to give up %40 of his or her paycheck. Ouch.
And the trend of rising life expectancy is continuing. New medical advances occur almost daily, and life expectancy is inconstant, always on the rise. Worse yet, the Baby-Boomer generation is fast approaching retirement age, and will massively increase the retired population (while they are currently contributing to Social Security funds as workers). All too soon, the worker-to-retiree ratio will likely be reduced to one-to-one, either forcing seniors to live on deplorably small Social Security checks, or forcing workers to regularly give up as much as half of their paychecks. That is, if Social Security reform doesn’t go through.
We are lucky enough to live in a country where many people work consistently at a job for only about half of their lives, and can then spend decades enjoying retirement. But this standard is in great danger. In years to come, the government will be faced with a choice: either scuttle the Social Security program, or supply it with funds from other sources, further enlarging the national debt. It’s not hard to see that the second alternative can’t solve the problem, just hold it off a little longer. But we can’t let the national debt grow indefinitely, and as it is, the amount of money taken from worker’s paychecks to support the program has already been raised six times. So, inevitably, Social Security will fail. It may not happen by the time my parents retire, but unless these bull-headed politicians get it through their thick skulls that Social Security reform is absolutely necessary, my generation, a large part of which is now in college, will have a real crisis on its hands one day–one which our younger brothers and sisters, and yes, our children too, will also be forced to endure.
More than six years ago, I can recall highschool teachers talking about the up-coming problems with Social Security, not as a theory, but as a fact. And these were teachers whose ideology was no secret. They were liberal, and they didn’t dispute it. But now, because our Republican president has put Social Security reform high on his agenda, the Democrats claim it to be part of some insidious plan. It’s petty and selfish and unconscionable. It’s party politics at its worst. Frankly, it’s just wrong. These people obviously don’t have the nation’s best interest at heart. In their minds, supporting a president that is so widely disliked in the liberal community, even when he’s right, would be blasphemous.
The claim is that privatizing Social Security is risky business. Sure. It probably is a bit risky. But consider the alternative! Social Security will fail. We need to do something about it. Besides, when someone like the very sage Allen Greenspan, who has been Chairman of the Fed since 1987, supports the program, who are we to disagree? OK, so the what about hard evidence; is there any? There sure is. In 1981, Chile privatized its Social Security program, and the move was a massive success. People lose a smaller portion of their paychecks to their retirement funds, and end up having a large, reliable source of income for their golden years. Why is this? Because private firms are far more efficient than the government. People can even go to ATM-like terminals to check on their accounts if they wish. Furthermore, workers even collect interest on the money! Wow! Then there are the sixteen other countries worldwide that have done the same thing, as well as three counties in Texas--and U.S. federal employees have this option too. Are there other effects? Of course. Like a better economy, resulting from the massive new sums of invested money. Lower unemployment, better economic growth, a faster rise in standard of living. Scary, right?
The simple truth is, public social security is going to fail. Without a doubt. What can we do about it? Tinkering won't save it. So we have to replace it. How? Very few options have been put forth. There's a reason for that. Very few options exist. The U.S. will eventually have to privatize it. So now the question is when. It's true, there's a hurdle to get over. The transition is going to cause a larger deficit, but it's gotta be done. And it seems pretty likely that the longer we wait, the more it's gonna cost. Forgive the further politicization, but President Bush is pretty brave--and wise. He knows that there are gonna be problems. He knows what must be done. He probably also knows that the process is gonna make him pretty unpopular. But he's doin' it anyway.
There are probably many out there who don’t believe me. That’s fine. But I only wish that people wouldn’t just prostrate themselves before the wild claims of the Democrats either. I would encourage voters to investigate the matter for themselves. See what they can dig up. Anyone who doesn’t actually know and understand the issue can not say that it’s for a lack of information. It’s all out there. But rather than just listen to wild postulations, try finding the logic. Try finding the evidence. For my sake. For the sake of the kids I hope to one day have. No, scratch that. Do it for you.
And the trend of rising life expectancy is continuing. New medical advances occur almost daily, and life expectancy is inconstant, always on the rise. Worse yet, the Baby-Boomer generation is fast approaching retirement age, and will massively increase the retired population (while they are currently contributing to Social Security funds as workers). All too soon, the worker-to-retiree ratio will likely be reduced to one-to-one, either forcing seniors to live on deplorably small Social Security checks, or forcing workers to regularly give up as much as half of their paychecks. That is, if Social Security reform doesn’t go through.
We are lucky enough to live in a country where many people work consistently at a job for only about half of their lives, and can then spend decades enjoying retirement. But this standard is in great danger. In years to come, the government will be faced with a choice: either scuttle the Social Security program, or supply it with funds from other sources, further enlarging the national debt. It’s not hard to see that the second alternative can’t solve the problem, just hold it off a little longer. But we can’t let the national debt grow indefinitely, and as it is, the amount of money taken from worker’s paychecks to support the program has already been raised six times. So, inevitably, Social Security will fail. It may not happen by the time my parents retire, but unless these bull-headed politicians get it through their thick skulls that Social Security reform is absolutely necessary, my generation, a large part of which is now in college, will have a real crisis on its hands one day–one which our younger brothers and sisters, and yes, our children too, will also be forced to endure.
More than six years ago, I can recall highschool teachers talking about the up-coming problems with Social Security, not as a theory, but as a fact. And these were teachers whose ideology was no secret. They were liberal, and they didn’t dispute it. But now, because our Republican president has put Social Security reform high on his agenda, the Democrats claim it to be part of some insidious plan. It’s petty and selfish and unconscionable. It’s party politics at its worst. Frankly, it’s just wrong. These people obviously don’t have the nation’s best interest at heart. In their minds, supporting a president that is so widely disliked in the liberal community, even when he’s right, would be blasphemous.
The claim is that privatizing Social Security is risky business. Sure. It probably is a bit risky. But consider the alternative! Social Security will fail. We need to do something about it. Besides, when someone like the very sage Allen Greenspan, who has been Chairman of the Fed since 1987, supports the program, who are we to disagree? OK, so the what about hard evidence; is there any? There sure is. In 1981, Chile privatized its Social Security program, and the move was a massive success. People lose a smaller portion of their paychecks to their retirement funds, and end up having a large, reliable source of income for their golden years. Why is this? Because private firms are far more efficient than the government. People can even go to ATM-like terminals to check on their accounts if they wish. Furthermore, workers even collect interest on the money! Wow! Then there are the sixteen other countries worldwide that have done the same thing, as well as three counties in Texas--and U.S. federal employees have this option too. Are there other effects? Of course. Like a better economy, resulting from the massive new sums of invested money. Lower unemployment, better economic growth, a faster rise in standard of living. Scary, right?
The simple truth is, public social security is going to fail. Without a doubt. What can we do about it? Tinkering won't save it. So we have to replace it. How? Very few options have been put forth. There's a reason for that. Very few options exist. The U.S. will eventually have to privatize it. So now the question is when. It's true, there's a hurdle to get over. The transition is going to cause a larger deficit, but it's gotta be done. And it seems pretty likely that the longer we wait, the more it's gonna cost. Forgive the further politicization, but President Bush is pretty brave--and wise. He knows that there are gonna be problems. He knows what must be done. He probably also knows that the process is gonna make him pretty unpopular. But he's doin' it anyway.
There are probably many out there who don’t believe me. That’s fine. But I only wish that people wouldn’t just prostrate themselves before the wild claims of the Democrats either. I would encourage voters to investigate the matter for themselves. See what they can dig up. Anyone who doesn’t actually know and understand the issue can not say that it’s for a lack of information. It’s all out there. But rather than just listen to wild postulations, try finding the logic. Try finding the evidence. For my sake. For the sake of the kids I hope to one day have. No, scratch that. Do it for you.
posted by BMD at 9:58 PM
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