Social Security: The Third Rail

It is time to address one of the gigantic areas of financial “entitlement” which is sinking the American ship of state: Social Security.   There are dueling plans by the Democrat and Republican congressional caucuses to cut government spending, both of which have failed in the Senate and both of which address no more than 2% of our Federal financial obligations.

Social Security, Medicare, and Medicaid are 3 gigantic areas of financial obligation in the Federal budget.   Each year these programs become a larger and larger percentage of the budget.   Social Security is running out of money.   It does not have the money to pay out what it has promised to pay out to people.   Social Security is one big broken promise.

It is a disgrace that the Democrats and Republicans both lack the courage to reform Social Security.  

Howard Rich makes good points in a recent article: Social Security: Why America Can and Should Allow Private Accounts:

[T]here are three simple questions that can be asked of any government program – including Social Security – which if answered honestly will point us in the direction of sensible, sustainable reforms.

First, is the outcome the program seeks to achieve consistent with the founding ideals of this country (i.e. advancing liberty and prosperity for all people)?

Second, is government’s involvement absolutely necessary in order to achieve this outcome?

And finally (assuming the answer to the first two questions is ‘yes’), should government’s role in achieving the outcome consist of directly funding or managing a particular task? Or should the private sector bear that responsibility – with government assuming a more limited oversight or regulatory role?

In addition to this three question analysis, I add the additional injustice for young professionals.   Young adults will pay Social Security taxes their entire working careers and most likely see little – if any – of what they paid into the system, when it is their time to collect.   The time has come to begin transitioning into another system that puts our future on a stronger footing and a better path.

The solution to the immanent disaster of Social Security will live up to the current obligations of the program, but wean people off of the current level of government benefits and allow those who want to do so to begin investing their retirement savings into an investment vehicle of their choosing.   Let individuals prosper and fail through their own investment decisions, rather than have us all fail due to the central planning of the sinking ship of state of America.

Mr. Rich concludes his article by writing:

Permitting private accounts for Social Security would not break a contract with the American people – it would efficiently fulfill one of the founding ideals of our Republic. It would also help pull our nation back from the brink of economic ruin.

(Image source – http://vinylnotes.com/wp-content/uploads/2008/08/sinking-ship.jpg)