I don’t blame the elderly, I blame the government. When I’m old, if someone offers me money, I’ll probably take it. After all, I will have paid in a pretty penny by then, and in some way I’ll feel like the government owes it to me. I could stay up on my moral high-horse and preach how I’m robbing our children and our children’s children, or I could take the money, invest it, and leave my kids a decent inheritance. If any real change is going to happen, it’ll be because politicians make it happen rather than because the elderly start refusing the government programs that they’ve paid into their whole lives. A better question is, what would make the politicians *want* to effect real change to the system? There seems to be a fair amount of debate about whether or not the system really is broken. This sort of goes back to your post about global warming–with strong and yet conflicting arguments from *experts* on both sides, what is the average Joe supposed to think or do?
Your comment misses my point, but to be fair I was less than clear with my point.
For background, you should check out a Social Security calculator like this one at the Heritage Foundation. It estimates I can expect to pay something like $376K - that’s THOUSANDS of dollars - into the system during my lifetime. (Note this estimate is probably low, since it seems to be using an average annual salary for my age that is not in line with my actual salary.) Even if I begin to draw money back, the likelihood that I will get even this much back - which, keep in mind, would assume zero growth and zero inflation over at least 35-40 years - is practically nil. Factor in the effects of inflation, the secondary losses to me caused by the fact the SSA is unable to manage its funds effectively enough to even equal (much less beat) inflation, and the disappearance of the funds I pay in but don’t live long enough to enjoy and can’t leave to my family, and it is easy to see SS is costing me several hundred thousand dollars.
But the money will go to someone else who is currently receiving SS. That means the SS system in its current form exists to transfer wealth from younger workers to older retirees. If an old person broke into my checking account every half-month and took part of my paycheck, he’d be jailed for stealing. But if he enlists the government’s aid to accomplish the same thing, somehow it’s okay. Our generation is being victimized by the fact our parents and grandparents are better mobilized. So long as they continue to dominate elections and continue the cycle of electing leaders who will continue to prop up the SS dinosaur, we will continue to have this money taken away from us against our will. The good news, if you’ll pardon me for being macabre, is that eventually that generation will pass on and the system will in fact collapse. We may not get back the money that we’ve paid in, but at least we can stop the bleeding. I hope (and believe) that will happen within 10-15 years, hopefully faster.
To be clear, I don’t hate the elderly. And I certainly don’t begrudge them from recovering what they’ve paid in. But it seems to me there is a sense of entitlement to benefits that does not appear to be rationally related to whatever has been paid in. That’s the part that’s just wrong.
I don’t think there’s any dispute that the current system is unsustainable, so I’ll have to disagree with you on that point. Going back to the last couple of presidential elections, my memory is that Bush, Kerry, and Gore all agreed reform was needed, but they disagreed on what should be done. Not that it matters, since Congress has to change it but has little incentive to do so. Which brings me to your question - politicians will only be motivated to change the system when it becomes politically expedient to do so. This will occur in one of two cases - either the system breaks, or a shift in the electorate (which is my euphemism for “enough old voters die off that the young voters start to call the shots”). I would bet on the former happening sooner than the latter.
My utopian idea would be to break the population up into four groups, arbitrarily by age. The first group would be those who are about 55 and up. These people get whatever benefits they would get under the current system, period, and the government will have to kick in whatever money is necessary to make that happen. The rationale is simple - these people are at a point in their lives where it would be manifestly unfair to yank the rug out from under them. The second group would be about 40-54 years old. They get a private IRA with a chunk of change in it. The amount they get would be equivalent to a portion of what they’ve paid in, but would clearly be less than what they would have if they had been allowed to invest the money themselves. So, they bear a portion of the cost of breaking the system, but they have time to recover and make whatever private retirement plans they deem necessary. The third group would be 25-39 years old. They get no IRA, so whatever they’ve paid in would be lost, BUT any federal or federally-backed student loan would be wiped out (private loans would still have to be repaid). So that group is fucked out of what they’ve paid in (thus also bearing a portion of the cost of breaking this system), but the way would be partially cleared for them to begin to set themselves up for proper retirement planning. The fourth group is the 24-and-under set. They simply get nothing, but the likelihood is they haven’t paid in all that much. At least they look forward to not paying SS for their entire adult lives. The upshot is that the government and the young- to middle-aged working class (i.e., basically all the players who have or are making money) would share the cost. And make no mistake - it will be a high cost, but I predict it will be cheaper in the long run than if we allow the system to collapse and leave a giant void.
I think it’s a little harsh to compare Social Security recipients to bank robbers. You (and many Americans) seem to be looking at Social Security as a retirement fund, when actually it is insurance. And payroll taxes are not *my money* any more than my federal income tax is my money. These are taxes paid in to support a welfare-type program. This program, like many others, is funded whether or not I use it. Sure, I’d rather pay $0 taxes, but that’s not realistic. I would like to see the system remain solvent, though, and I think the best way to simultaneously support the program and encourage individual retirement without increasing taxes is to cut benefits. And *that*, ladies and gentlemen, is why I will not be elected president anytime soon.
Either way, someone else has my money. The only difference is that we’ve decided one means of acquisition is legal and the other is not.
“You … seem to be looking at Social Security as a retirement fund …”
Exactly wrong. My criticism stems from the fact that everyone else seems to think of it that way, which (as you point out) is incorrect. My solution builds upon that prevailing, though incorrect, viewpoint.
So what it comes down to is that you believe the program should remain in place but pay less to its recipients, whereas I believe the program should be killed and we should eat the cost sooner rather than later. Reasonable minds can disagree on that, I guess, and I can do little more to make you see the clear error in your fractured thinking. ;)
I don’t blame the elderly, I blame the government. When I’m old, if someone offers me money, I’ll probably take it. After all, I will have paid in a pretty penny by then, and in some way I’ll feel like the government owes it to me. I could stay up on my moral high-horse and preach how I’m robbing our children and our children’s children, or I could take the money, invest it, and leave my kids a decent inheritance. If any real change is going to happen, it’ll be because politicians make it happen rather than because the elderly start refusing the government programs that they’ve paid into their whole lives. A better question is, what would make the politicians *want* to effect real change to the system? There seems to be a fair amount of debate about whether or not the system really is broken. This sort of goes back to your post about global warming–with strong and yet conflicting arguments from *experts* on both sides, what is the average Joe supposed to think or do?
Comment by ksdunham — May 15, 2007 @ 1:04 am
Your comment misses my point, but to be fair I was less than clear with my point.
For background, you should check out a Social Security calculator like this one at the Heritage Foundation. It estimates I can expect to pay something like $376K - that’s THOUSANDS of dollars - into the system during my lifetime. (Note this estimate is probably low, since it seems to be using an average annual salary for my age that is not in line with my actual salary.) Even if I begin to draw money back, the likelihood that I will get even this much back - which, keep in mind, would assume zero growth and zero inflation over at least 35-40 years - is practically nil. Factor in the effects of inflation, the secondary losses to me caused by the fact the SSA is unable to manage its funds effectively enough to even equal (much less beat) inflation, and the disappearance of the funds I pay in but don’t live long enough to enjoy and can’t leave to my family, and it is easy to see SS is costing me several hundred thousand dollars.
But the money will go to someone else who is currently receiving SS. That means the SS system in its current form exists to transfer wealth from younger workers to older retirees. If an old person broke into my checking account every half-month and took part of my paycheck, he’d be jailed for stealing. But if he enlists the government’s aid to accomplish the same thing, somehow it’s okay. Our generation is being victimized by the fact our parents and grandparents are better mobilized. So long as they continue to dominate elections and continue the cycle of electing leaders who will continue to prop up the SS dinosaur, we will continue to have this money taken away from us against our will. The good news, if you’ll pardon me for being macabre, is that eventually that generation will pass on and the system will in fact collapse. We may not get back the money that we’ve paid in, but at least we can stop the bleeding. I hope (and believe) that will happen within 10-15 years, hopefully faster.
To be clear, I don’t hate the elderly. And I certainly don’t begrudge them from recovering what they’ve paid in. But it seems to me there is a sense of entitlement to benefits that does not appear to be rationally related to whatever has been paid in. That’s the part that’s just wrong.
I don’t think there’s any dispute that the current system is unsustainable, so I’ll have to disagree with you on that point. Going back to the last couple of presidential elections, my memory is that Bush, Kerry, and Gore all agreed reform was needed, but they disagreed on what should be done. Not that it matters, since Congress has to change it but has little incentive to do so. Which brings me to your question - politicians will only be motivated to change the system when it becomes politically expedient to do so. This will occur in one of two cases - either the system breaks, or a shift in the electorate (which is my euphemism for “enough old voters die off that the young voters start to call the shots”). I would bet on the former happening sooner than the latter.
My utopian idea would be to break the population up into four groups, arbitrarily by age. The first group would be those who are about 55 and up. These people get whatever benefits they would get under the current system, period, and the government will have to kick in whatever money is necessary to make that happen. The rationale is simple - these people are at a point in their lives where it would be manifestly unfair to yank the rug out from under them. The second group would be about 40-54 years old. They get a private IRA with a chunk of change in it. The amount they get would be equivalent to a portion of what they’ve paid in, but would clearly be less than what they would have if they had been allowed to invest the money themselves. So, they bear a portion of the cost of breaking the system, but they have time to recover and make whatever private retirement plans they deem necessary. The third group would be 25-39 years old. They get no IRA, so whatever they’ve paid in would be lost, BUT any federal or federally-backed student loan would be wiped out (private loans would still have to be repaid). So that group is fucked out of what they’ve paid in (thus also bearing a portion of the cost of breaking this system), but the way would be partially cleared for them to begin to set themselves up for proper retirement planning. The fourth group is the 24-and-under set. They simply get nothing, but the likelihood is they haven’t paid in all that much. At least they look forward to not paying SS for their entire adult lives. The upshot is that the government and the young- to middle-aged working class (i.e., basically all the players who have or are making money) would share the cost. And make no mistake - it will be a high cost, but I predict it will be cheaper in the long run than if we allow the system to collapse and leave a giant void.
But I digress.
Comment by Mike — May 16, 2007 @ 1:15 pm
I think it’s a little harsh to compare Social Security recipients to bank robbers. You (and many Americans) seem to be looking at Social Security as a retirement fund, when actually it is insurance. And payroll taxes are not *my money* any more than my federal income tax is my money. These are taxes paid in to support a welfare-type program. This program, like many others, is funded whether or not I use it. Sure, I’d rather pay $0 taxes, but that’s not realistic. I would like to see the system remain solvent, though, and I think the best way to simultaneously support the program and encourage individual retirement without increasing taxes is to cut benefits. And *that*, ladies and gentlemen, is why I will not be elected president anytime soon.
Comment by ksdunham — May 23, 2007 @ 1:24 pm
Either way, someone else has my money. The only difference is that we’ve decided one means of acquisition is legal and the other is not.
“You … seem to be looking at Social Security as a retirement fund …”
Exactly wrong. My criticism stems from the fact that everyone else seems to think of it that way, which (as you point out) is incorrect. My solution builds upon that prevailing, though incorrect, viewpoint.
So what it comes down to is that you believe the program should remain in place but pay less to its recipients, whereas I believe the program should be killed and we should eat the cost sooner rather than later. Reasonable minds can disagree on that, I guess, and I can do little more to make you see the clear error in your fractured thinking. ;)
Comment by Mike — May 23, 2007 @ 3:43 pm