I think that part of the problem with debating how the United States ought to continue to fund Social Security, or how it should administer the funds accumulated by the program, is that there are fundamental disagreements over the plan’s functions.
Here’s a simple situation for comparison. Suppose the UN were to put me in charge of a Marshall Plan of sorts for Cuba immediately after the natural death of the present Cuban government. One of my objectives regarding the economy would be to ensure worker security. I would set as my goal the following:
Establishing that all people that have met minimum requirements, or fall under certain exceptions (e.g., unable to work, disabilities, infirmities) will be provided with a "safety net" upon their retirement. Based on reasonable actuarial calculations, they will pay into the program during their lifetimes to cover the expected costs.
[Note that administrative details are irrelevant for purposes of establishing policy in my example. If you want to go negative on details of bureaucracy, write your own blog entry and keep mine out of it!]
This would be categorically an INSURANCE plan. It would not be a pension plan.
There is such a thing as an insurance industry. I participated in compliance audits of most of the big insurance companies after Hurricane Andrew and I think their adjusters’ abilities to detect fraud are actually quite good.
Back to Social Security then, I’m actually more than willing to concede the private accounts argument - as much as I have railed
against it - so long as the insurance component doesn’t change.
My only desire is for the government to ensure a safety net is available for the people that need it, regardless of whether they had the foresight to know they would be needing it. Righties may be against the state providing services of any kind, but until they get some actuarial backup that shows how they intend to flout the fact that x number of people will become destitute, they will have zero credibility.
Back at the Cuba example…. I have seen withered and half-starved old people in Cuba that subsist on their rations of rice, a piece of bread, and other things like an egg every fourteen days - but only if they happen to have eggs on your day to pick up your egg. The government bread usually has some protein in the form of ants. I have personally gone with somebody to pick up his ration and I did eat of this bread.
The reason I defend Social Security is that I strongly believe that old people should live with dignity and that society should guarantee a subsistence living. Society should do a lot more to ensure there are as few free-riders as possible, but it should error on the side of letting there be more free-riders rather than letting people starve in their old age.
I don’t really believe that changes to Social Security are necessary. But I’d be willing to consider separating out the component that represents a retirement plan for people that don’t really need it. If you want to manage your own investments during your lifetime… I really have no problem with this at all; I wonder that you don’t just shut up and do it - it’s not like SS sucks up the bulk of your income, you know….
whereIstand Tags
Tags: Uncategorized by nick
1 Comment »