More On Social Security Debate
Editor, The Herald:
A recent topic on these pages has been whether a citizen should be allowed some control over his Social Security funds, or whether to continue allowing the government to maintain total control of the system. The discussion originated from Rep. Tom Perriello's (D-Va.) article “Don't Privatize Social Security,” and his agreement with the Obama-Pelosi machine in refusing to consider prudent, time-tested principles in voluntary privatization.
In my letter to the Herald, published Sept. 3, I cited a study by the National Center for Policy Analysis (NCPA) regarding new workers having to pay “far more in taxes than they will receive in transfer programs,” such as Social Security and healthcare, which is true. Another reader, in his letter published Sep. 9, argues that the study was skewed, and criticizes the author, Professor Walter Williams, for his “eccentric economic theories and far-right politics.” He also claims that the NCPA essentially churns out the agendas of greedy corporate executives.
The NCPA study examined a person's lifetime taxes and compared them with benefits received. The letter writer suggests that the list of taxes paid should have included only taxes for Social Security/healthcare/welfare, since the benefits listed included only those from Social Security/healthcare/welfare. He makes a good point IF we consider the population as a whole-taxpayers and non-taxpayers; however, what he forgets to mention is that many individual taxpayers contribute huge amounts of money to the healthcare and welfare funds, and yet many don't enjoy those services: They pay for their own healthcare, and they're not on welfare. He doesn't mention whether he believes our benefits equal or exceed our tax contributions-they don't-he just criticizes the study and the NCPA.
In regard to Social Security, taxes paid and benefits received vary with different tax brackets, with marital status, etc. But one thing is certain: the later you enter the workforce, the shorter your end of the stick. This is not an “eccentric economic theory” concocted by the “far-right.” To avoid any confusion, charges of indiscretion or denunciations of dishonesty, let's take a look at a study from an organization with a solid, liberal-leaning background:
The Urban Institute-a non-partisan, independent research institute, established by Lyndon Johnson, which receives 62% of its funding from government contracts-conducted a study in 2004 that estimates a male with a $65,000 salary who retires in 2045 will lose more than $100,000 simply by participating in the Social Security system.
There is no debate that a problem exists: the federal government has been raiding the Social Security Trust Fund for decades for non-Social Security programs. What is left is a paper stack of IOUs. These so-called “investments” in U.S. securities are just more empty promises. The funds that should have been growing through wise investments over the years and made available to retirees have instead been going to fund pork-barrel projects and more income transfers.
The money looted from the retirees' coffers for wasteful programs and replaced with IOUs could have been invested in concrete assets if individuals with a vested interest had been allowed to manage their own funds. If some would have preferred to invest in U.S. Bonds, so be it. It's their money.
With their history of tax, loot, and spend, is it any wonder that Perriello, Obama, Pelosi, and others won't even consider these options? What they don't seem to understand is that the problem with programs like these, to paraphrase Margaret Thatcher, is that “eventually you will run out of other people's money.”
Angus K. McClellan