Tuesday, May 24, 2005
inheriting Social Security?
The Cato Institute is running an ad in favor of Social Security reform. The arguments they give are presented in three categories: Ownership, Inheritability and Choice. I would expect any plan favored by this particular group (the Cato Institute is famously pro-free enterprise and politically libertarian) to feature investment choices for individual workers.
I haven't looked at their most recent specifics, but many of their past suggestions have been clear-headed and realistic in focus. Choice I can see. But what part of original Social Security safety net addressed ownership and heritability? President Bush talked about turning retirement accounts into family wealth at one (probably more than one) of his town meetings in the spring, and it had caught my ear at that time as well. Am I missing something? Is what I learned back in high school in the 1970's wrong?
It seems to me that we may be confusing the language used to sell the retirement safety net to the public at large with the program as it was actually set up. The plan that we now call Social Security was always a "pay-as-you-go" system. That means the contributions of current workers paid for the benefits of current retirees. Otherwise, where would the money for the original beneficiaries have come from? If social security accounts were actually owned by individual workers, there would be no looming crisis for baby boomers. The money would have been sitting there waiting for us, instead of paying for current programs.
I am a big fan of the Cato Institute. But here is what I think is un-American about their plans for Social Security: The program was never intended to be a protector or enabler of inherited wealth. I was taught that the rule of society by a few well-known and well-propertied families was one of the main things our forefathers came here to get away from. Is that a misreading of history?
I haven't looked at their most recent specifics, but many of their past suggestions have been clear-headed and realistic in focus. Choice I can see. But what part of original Social Security safety net addressed ownership and heritability? President Bush talked about turning retirement accounts into family wealth at one (probably more than one) of his town meetings in the spring, and it had caught my ear at that time as well. Am I missing something? Is what I learned back in high school in the 1970's wrong?
It seems to me that we may be confusing the language used to sell the retirement safety net to the public at large with the program as it was actually set up. The plan that we now call Social Security was always a "pay-as-you-go" system. That means the contributions of current workers paid for the benefits of current retirees. Otherwise, where would the money for the original beneficiaries have come from? If social security accounts were actually owned by individual workers, there would be no looming crisis for baby boomers. The money would have been sitting there waiting for us, instead of paying for current programs.
I am a big fan of the Cato Institute. But here is what I think is un-American about their plans for Social Security: The program was never intended to be a protector or enabler of inherited wealth. I was taught that the rule of society by a few well-known and well-propertied families was one of the main things our forefathers came here to get away from. Is that a misreading of history?
