Social Security. It is a joke, huh? You pay into it your whole life, and then you see just some of it when you retire. It reminds me of a commercial for used cars I used to see back home. "Wow, what a deal!" the woman would exclaim. Thanks, but I'll pass.ÿEven if you believe in the original idea of the system, you cannot deny it is now horribly broken. Do the math. Workers pay Social Security, not directly for themselves, but for the seniors retiring today. Prior to World War II, there were approximately 40 payees for every retiree. Today there are three.ÿ
It is therefore impossible to pay today's retirees what those of the past received. In fact, while retirees of the World War II generation received significantly more in benefits than they paid in taxes, baby-boomers can expect a rate of return of 2 percent. Generation X can expect a rate of return of 1 percent, and the next generation can expect a rate of return of zero.ÿ
And here's an interesting fact: did you know that Social Security benefits are not guaranteed by law? The Supreme Court decided in Helvering v. Davis that individuals have "no legal right to Social Security benefits." So even though you are required by law to pay the Social Security tax, you have no legal right to collect. What a ripoff! ÿ
Most Democrats and Republicans will agree that the system is not working in its current state. And, unlike some political issues that are wrapped up in partisanship, there are a number of legitimate solutions out there to fix Social Security. Some people would suggest that it is best to cut the benefits and raise the age when one would collect. (This idea would then be sheepishly retracted as soon as the aforementioned person considers a career in politics.) Others would suggest not using money in the Social Security trust fund to pay for non-Social Security projects. Who would have thought!
But there are even more ideas. Sometimes my Libertarian side kicks in and I have to wonder, why don't we just get rid of the whole thing? Pay back those who have paid into it, and let everyone else in the future actually keep their whole paycheck from now on. Imagine that, people keeping their own money in their own bank accounts.ÿ
Pardon my tangent, but have we grown callous to the fear of signing away our paychecks to the federal government? There is an assumption going around that Congress will keep a better eye on it than we will. This is why Social Security, in its worst form, is insulting.ÿ
If the rate of return is approaching zero, the system is nothing more than a holding cell. Picture this imaginary vault where the government keeps a close eye on our Social Security dollars. Its lock would be soldered through - the door bent out of shape, lying on the floor, and inside would be a pack of Congressmen plotting to spend a cool billion dollars here and there.ÿ
I'll admit Social Security reform isn't at the top of college students' priorities. We grudgingly see how much of our paycheck is taken out for Social Security and then we get on with our lives. We save the panicking for when we are 50 or so.ÿ
And as of now, Social Security reform has yet to take a prominent role in the 2004 campaign. Often referred to as the "third rail of American politics," Social Security reform was a major issue in the 2000 election. George W. Bush was the first candidate for president to seriously discuss voluntary individual accounts. As the president stated, "because there will be an expanding number of retirees for Social Security to support in the future, we must apply the power of savings, investing, and compound interest ... by introducing personal retirement accounts. Americans would own these assets [and] they would see more retirement income." It is a good idea, but I'm still waiting.ÿ
While the relative inaction on this issue is a bit disheartening, so too is the way in which the current candidates for president have wholly ignored it. I recently visited John Kerry's presidential campaign Web site. I was curious to see what the Democratic frontrunner had to say about fixing Social Security. I clicked on the "Issues" button and scrolled around. The only thing that came close to the Senator's position on any kind of entitlement program, is as follows, quoted directly from the senator's Web site: "Many politicians have supported major cuts that cause premium increases and cutbacks in benefits. John Kerry won't."ÿ
Huzzah! Senior citizens rejoice: John Kerry is determined to fix Social Security and will... will... well, I don't know what he will do. You're going to have to take his word for it. Again, thanks, but I'll pass.
