Privatize Social Security
Dear Editor:Since the overly generous Aspen Times editorial staff affords such great opportunities for its loyal readers to plagiarize the opinion of editorialists who actually get paid to pontificate on matters of national import, I figured I’d join in on the topic du jour.Unfortunately, I find myself playing the role of contrarian, flatly incapable of squaring off on the issue of Social Security reform along pro-Bush/anti-Bush lines.Bush, of course, should be appreciated for his boldness in bringing the centerpiece of the modern welfare state to the forefront of national debate. As I see it, however, the real issue is not whether I should be permitted to take one-third of 12.4 percent of my annual income and invest it a collection of diverse, government-approved, low-risk investments. This attempt at giving taxpayers an illusion of control over their own retirement destiny is just a tad less silly than accusations that such measures constitute “privatization.” If only.That having been said, Bush’s proposal does appear modestly calculated to address the fatal flaw of Social Security: the requirement that all contributions be placed in a common pool to be administered by the feds. Our current representatives carry out those duties in a fashion that makes their public grandstanding against Enron executives laughable, but the larger defect is more systemic: Unlike any private pension fund, no contributor to Social Security has any vested right grounded in his individual contribution. Such a scheme was a deliberate attempt to ensure that those who had paid nothing could collect retirement benefits in 1935, but what has resulted is a system of intergenerational transfer payments where the rates of return systematically drop over time.Accordingly, the “security” in “Social Security,” is entirely lopsided. One writer characterized its beneficiaries as “those least able to care for themselves.” They are, in fact, the wealthiest contingent of the population that has a source of income guaranteed against market fluctuations – all funded by taxes that come directly out of the pockets of the younger and poorer who navigate the prevailing economic winds at their peril. This allegedly secure retirement fund is, in actuality, a massive and remarkably counterintuitive welfare program where everyone’s “security” is put at risk for the sake of its richest members.Recognizing that entitlements exact a powerful toll on both national politics and the national psyche, reformers should embrace the proposition that “Social Security,” such as it is, really should be privatized. Standing today, it is nothing more than a regressive scheme. If government compulsion is deemed necessary to guard citizens against their own improvidence, the least that could be done is to allow contributors to retrieve their own money. Right now, Social Security taxes are nothing more than a compulsory investment in the increasingly unlikely probability that payers will be able to pick the pockets of the next generation. I’ll take Enron over that any day.Jay PateSnowmass Village
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