A Gathering Storm

POL 213:

A headline caught my eye today. It seems that our senators are finally realizing the full effects of a looming problem facing our nation. As the Baby Boom generation edges closer and closer to the golden age of retirement, the feasibility of paying their allotment of the Social Security nest egg slims. It's not as though they haven't seen it coming, or that no one has touted a plan to fix it before, but there hasn’t been a sense of urgency that is evident now. In fact, the Senate’s budget writers have proposed creating a task force to recommend solutions to the coming financial drain that would be required to deliver its consensus by December of next year. It would be fast-tracked through both branches of legislature to come to a final vote.

Senator Kent Conrad of North Dakota stated, "We cannot ignore the coming crisis and hope that future leaders will solve this problem. The longer we wait, the harder the choices become." He’s right. There is no easy way to fix a system that is beyond hope already. When there are so many frail people depending on those monthly checks, the pressure is even more intense.

The Social Security plan has inherently fatal flaws. The first is that the Constitution gives absolutely no authority for the kind of universal wealth distribution system that the plan espouses. In fact, the Constitution clearly establishes the rights and role of the government (for instance, running a postal system), while leaving all other interests to the private citizen to pursue. The framers knew that individual interests would create a much more efficient and effective system of distribution than anything they could possibly create.

The system was set up with short term vision regarding our country and population demographics. Of course Roosevelt and the legislators of 1935 could not foresee the drastic changes in births from the 1950s to today’s world, but they should have at least considered the potential complications to their plan. At this point, we have a small workforce trying to support a large number of retirees. It simply isn’t sustainable.

There is also no incentive given to create more wealth under this plan. All citizens are treated equally when it comes time to collect their monthly check. It cripples those who would take initiative by requiring them to invest. What if I’d rather privately invest that money? Too bad! I have no choice but to throw more into the system than what I can ever expect to receive in return.

At a rough time in our country’s history, the decision to raise taxes by requiring Social Security payments from both citizens and employers caused nothing but trouble. As employers struggled to pay higher fees, yet weren’t rewarded with any extra business, they were forced to cut back on their number of employees. This made the effects of the Great Depression stretch further into the lives of every American as unemployment skyrocketed.

I wish the new task force well as it embarks on a politically-charged mission to reform a corrupt system. Their job will not be easy. No one seems to have a good solution to the problem. I think that privatizing retirement investment options would be a good start. Perhaps we should even encourage it by eliminating all taxes on investments! This would be a good time to “take one for the team” and correct a mistake made by misinformed or misled former legislators.