Friday, January 14

Screwing Up Social Security

Now I'm pretty much against everything about Social Security. Not that I think there should be no "safety net", but that I think it should only apply to those people who truly need it and I don't think it should be "comfortable" so that people are inclined to "live" in the net. But my point today isn't directly about Social Security, but the arguments used by the opponents of the reforms hinted at by Mr Bush.

One of the arguments used to attack privatization of Social Security is that it "will endanger" the whole system. Well that sounds like a bully idea to me. If we can't get over the "privitization" hump once were committed, what would the alternative be at that point? Scrap it? Well, that doesn't exactly sound like a bad alternative. To recap, the argument then against privitization and repair of a fundamentally bad program is that if we fail at fixing it, we might have to scrap the whole thing.

Also, arguments that a regressive inefficient unfair system that encourages us not to plan effectively for our future should not be repaired, fixed, and or replaced because it will might do ok for the next 20 years if only taxation level are "mildly increased" seem a little weak as well.

Now I don't prefer Mr Bush's plan. What I think should be done is that Social Security should be replaced with a plan that requires aggressive means testing, i.e., if you have no assets we will provide a subsistence level of support. I think that plan should be paid for from the general fund. Alas, we should keep promises made in the past, but we should terminate current accrual of Social Security benefits ASAP. We could ask wealthy retirees who do not need Social Security currently to voluntarily forgo receiving it so as speed the transition. As the pool of SS recipients decreases the tax burden of Social Security (the 15% wage tax) could be decreased accordingly. Taxpayers should be informed right now, what they could expect to receive, when and how much. They should be informed that any other retirement plans are their personal responsibility.