Have Such Faith in Republicans
Thomas R. Eddlem
by Tom R. Eddlem
of my favorite taunts against liberal Democrats on the Social Security
privatization debate is to say: "You shouldnít place so much
faith in the Republican Congress to manage your retirement account."
When you tell liberals that, theyíll say they agree with you that
Republicans canít be trusted, but they only agree because they simply
donít get it. Usually, they respond with some rant about how a "privatization"
plan is a bad idea and that we should stick with the same old surefire
bad deal in the current system. It never occurs to their tiny little
brains that the Republican Party runs the federal government, and
therefore the Social Security program, and that privatization would
take this power out of their hands. I always have to explain:
me put it in the form of a syllogism for you: The Social Security
is part of the federal government; the federal government is run
by the Republican Party; therefore the current Social Security
system is run by the Republicans. You are placing your faith in
the Republican Party to run your retirement, whereas I support
privatization because I donít trust them."
reaction is always the same: the smell of something burning Ė and
a brief, stunned silence similar to the reaction you get from a
"flash-bang" stun grenade Ė followed by some statement
that they support a change of power to the Democrats.
not likely. Consider that the Democratic Partyís official strategy
is to declare total, unquestioned faith in the Republican Partyís
ability to manage everyoneís retirement income, in preference to
allowing the rest of us dumb commoners manage our own accounts.
party with such a low opinion for the ability of the majority of
the people to outperform a spendthrift Republican Congress financially
is not one poised for a return to power. After all, what kind of
contempt for the common American is manifested in the assertion
that they have less financial prowess than the same body that recently
passed 11,000 pork barrel projects in a single bill? Remember, this
is the same Congress responsible for emptying out the so-called
"Social Security Trust Fund." This is the same body that
is the main financier of Bostonís sieve-like "Big Dig"
harbor tunnel project, perhaps the only $15 billion (and counting)
combination underwater tunnel and car wash project in modern history.
Yet liberals say the average American canít invest his money as
wisely as Congress.
the liberals claim to represent the people. But they detest
the same people they represent. They believe that the American people
are too callous to provide for their less fortunate neighbors voluntarily,
which explains the need for a welfare state. And donít try to buy
a handgun for protection, because the liberals donít trust you with
them either. If you want protection, just do what the other "common
men of the people" such as Ted Kennedy do, hire a squad of
Security is already a bad deal for retirees compared with any private
stock index fund, even at the bottom of a serious bear market such
as we experienced in 20002002. Thatís a provable fact, and
proven it in a recent article for The New American magazine.
Whatís more, because workers under 40 are paying more as a percentage
of their income into Social Security than their fathers (and for
smaller benefits), the ripoff is becoming more and more pronounced.
Anyone who doubts this fact can check out the
spreadsheet I created contrasting Social Security benefits with
a private account, or create his own spreadsheet comparison.
surefire indicator that youíve won the argument on Social Security
privatization is when the liberal you are talking with starts spouting
the Democratic Party talking point about how "Social Security
is not a retirement program where you acquire your own personal
stash, but an insurance program." Thatís the equivalent of
saying "I donít care if I impoverish Americaís workers, including
the working poor, along with Americaís elderly; the most important
point is to keep the government in control of their money."
recent proposal by Senator Chuck Hagel (R-NE) to extend the full
retirement age for Social Security from 67 to 68 years is indicative
of the inherent problem in a "pay as you go" scam like
Social Security. The main problem with any "pay as you go"
system (other than the fact that it is beyond the authority given
to Congress under the Constitution) is that the longer the people
live, the worse a deal the system becomes. If three people paying
taxes for 40 years support one Social Security recipient receiving
benefits for 20 years, then a recipient who collects for 30 years
after retirement must have three people working 60 years to support
the same benefit level.
people live longer Ė and the American people are increasingly living
longer Ė you must either raise the contribution (taxes), cut the
benefit payout, or postpone the date of retirement (which is a cut
in benefit). Liberals have made their decision about which they
would prefer to do. They want to increase taxes, especially if they
can be raised only on "the rich." (Remember the Bill Clinton
definition of "rich" for the purposes of tax increases:
anyone making more than $30,000 per year.)
payout from a stock savings fund, however, is not based upon how
long other people will live to collect the benefits. Rather it is
based upon how much you put in, and how long it earned interest.
Once you have money in stocks, you can keep collecting until you
reach 150 years of age and it wonít impact the solvency of the stock
short, the longer Americans live, the worse a deal Social Security
becomes compared to a private fund. The only way the Democratic
Party might be salvaged is if the Republican Party self-destructs
on privatization. That may happen. Bush may bungle the issue with
a phony "privatization" that will discredit the issue
for years to come. However Bush and the Republicans in Congress
handle their reform agenda, it wonít change the fact that Social
Security is an ever increasingly raw deal for all Americans.
time for a "New Deal" that is a good deal: Total privatization
[send him mail] is
a freelance writer and a radio talk show host based in Massachusetts.
His website is located at www.dangeroustalk.com.
© 2005 LewRockwell.com