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Social Security – America’s failing socialist experiment.

June 24, 2019

With the con artists on the left promising free everything, including basic income, it might be time to look at the one example of government control of income that we have now.

If you want to know how socialism works, you have only to study our government retirement program.

First, it was never “government” funded. It’s funds come from payments by wage earners and their employers…in other words YOU.

Second, it is government administered, and the government has done a lousy job of that.

Third, unlike private pensions, the government cannot be sued for failing to keep it solvent.

We have known for at least 50 years that the fund was going to run out of money.  Various prognosticators now say that will begin to happen next year, or maybe as late as 2025.

If employment stays as high as it is now for the next 6-8 years, those estimates might extend by a year or two, but that won’t totally make up for eight years and more of high unemployment numbers and low labor participation rates.

The answer to the problem was evident as early as the 1980’s. The amount withheld needed to be increased as inflation ate away at the value of the fund, or as it was made to pay for more things (disability income, child survivor benefits, etc.)

Even Boomers who did put aside money to augment SSI are hurting, as life events, recessions, inflation and periods of high unemployment have forced them to eat into their savings or sell off marketable assets.

The answer to keeping Social Security solvent is the same now as it was 50 years ago.

More money must be paid in to cover increased usage, which should have been accomplished by tying the withheld percentage to the cost of living. Instead, the answer seems to be to cut benefits.

That’s still how it can be fixed, but now, instead of adding a tenth of a percent or some such figure every year or two, it has to be a substantial jump, perhaps even as much as double.

A “wealth tax” isn’t going to do it, Elizabeth Warren’s schemes notwithstanding, and it’s unlikely a Republican  of any stripe wants to be the one to jack up the FICA withholding in an election period.

It’s trendy to blame the Baby Boomers (born 1946-64) for the shortfall. Uh, the government didn’t know by 1970 about the baby boom?

The Boomer and WWII generations are already dying off, with their oldest members already well into their 90’s, but it’s unlikely that they’ll die fast enough to add much to the fund’s lifespan.

If a private pension plan administered its funds the way the government has, the courts would force them to make the fund solvent.

With the U.S. government being the responsible party, the word to Boomers and beyond is simply…tough luck, and here’s your sign.

Think about that the next time some politician tells you how much better they are at caring for you than you are at caring for yourself.

From → op-ed

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