Who Needs Social Security? [Fribble] June 15, 2000

Fribble Who Needs Social Security?

June 15, 2000

What's the purpose of Social Security? It was designed 65 years ago in the midst of the Great Depression as a floor against absolute penury for the underclasses of workers and their families. However, the plan was made in a time when a big day of trading on the New York Stock Exchange was maybe 1 million shares, when there was no Nasdaq, when a new car cost maybe $500, when there were not 300 billionaires, 5 million millionaires, and 900,000 people making $100,000 a year or more as there are today.

Both political parties will tend to lie about Social Security and about every other issue in the coming election, and they will distort the good and the meretricious arguments of their opponents, without truly distinguishing either.

In my opinion, there is nothing objectionable about taking about one-fourth of future Social Security funds and investing that, while protecting all past moneys put into Social Security and protecting existing benefits. I'll go further. There is nothing wrong with extending the retirement age beyond what is presently proposed in the face of a generally extended life expectancy in America.

Bush and his gang have the better idea if they come up with the necessary details shorn of rhetoric that says the government should not control the funds in the stock market. A rational plan from Congress would cover these faults in Bush's logic and would also include some sort of rational means testing. Means testing has always been a no-no with both political parties as they cater to the electorate and consequently there's never been a serious attempt to examine what means testing could do for Social Security.

Why does a millionaire need, as opposed to want, Social Security payments in retirement? Why not have a plan that has you pay into the system (it is an insurance system after all) and if you have such and such wealth at retirement, you get nothing, but if you ever need this pittance, the fund will pay you retroactively to the day of retirement?

My mother never earned a dime in her married life, yet she collected more annually in her nearly 40 years of widowhood than my father ever put in into the system in his whole life. She was quite wealthy. No one making more than $100,000 a year or worth millions needs Social Security that was designed for poor people. They don't need, in most cases, a floor to insure against poverty. If they do ever need this minimal protection (which can be defined in any modern context) they could be paid retroactively with a rational plan.

Further, there is no reason not to increase the contribution rate to those earning $1 million a year or more. This is not a tax, it is an entitlement seemingly out of control and it hits the wrong people the hardest today.

My earnest hope is that this bunk about no new taxes be taken out of politics and that the new Congress tackle the real problems. Near the top of these is the steadily increasing poverty in the wealthiest country that ever existed. I would personally give up my Social Security payments, which is just added income, in favor of a rational plan that would guarantee me a floor, if I ever need it, and a lump sum out of what wasn't paid back to me that would be immune from creditors.