January 21, 2005
Let's Talk Money (By guest blogger Jessica)
Larry Elder, (love, love that man) has uncovered the real reason behind those opposed to private accounts for Social Security. According to Geraldine Ferraro:
'[I]f you don't have the knowledge [emphasis added] and the wherewithal [emphasis added] to manage your own private funds," said Ferraro, "well, you know, you're gonna be out of luck.'
In other words, we're too darn stupid to manage our money. Elder continues with a similar idea, brought out by this Clinton quote.
'We could give it all back to you and hope you spend it right... Do you really want to run the risk of squandering this surplus?'
Now, granted, this may be partially true. Yes, most Americans aren't very knowledgable about their finances. But we have to think about the reasons for that. Perhaps there are many people who are too dumb to invest their money so as to have maximum accumulation of their wealth. Perhaps they don't have any sense to find out the difference between a stock and a bond. But there are many people who are more than capable of managing their money and getting a rate of return far greater than they are getting currently, but are not doing so only because they never had the incentive to do the legwork. And hey, who can blame them? How many people actually do the research for their 401K, unless they have or will have a 401K? I certainly fall into this category.
I am a firm believer in giving the public their freedom through responsibility. Is it fair that I am not given the choice to invest my money the way I'd like, because some stranger doesn't want the accountability?
Read Elder's entire article. (Did I mention I love that man?) You can thank me with later with a generous gift. [wink wink]. I leave you all with this paragraph.
Congress never intended for Social Security to grow into something on which people solely relied for their retirement. Even its patriarch, Franklin Delano Roosevelt, said, "We shall make the most lasting progress if we recognize that Social Security can furnish only a base upon which each one of our citizens may build his individual security through his own individual efforts."
Posted by Jessica at January 21, 2005 02:15 PM | TrackBackTechnorati Tags:
Actually, I am opposed to privatization of social security because every dollar paid into the system today is used today to pay benefits that serve as that "base" for the retired that FDR talks about. So if instead of a dollar, I know put in 70 cents and 30 cents to a private account, that is 30 cents not going to pay benefits for retirees TODAY. Three real solutions to the problems facing retirees and social security 1. Apply the payroll tax to 100% of income; 2. Impose income restrictions for social security recipients and/or 3. Decrease benefits. Everything else is smoke in mirrors aimed at lining the pockets of special interests.
Oh, I just thought of a fourth -- keep lowering the price on tasty, fried foods, so that no one lives to collect social security. mmmm....fried.
P.S. Why is the whole site italicized? I'm looking at you Jessica....
And you want to manage your own retirement funds?
Heh. My aunt is a huge Larry Elder fan as well.
Posted by: Shawn at January 21, 2005 03:18 PMThese quotes underscore the absolute arrogance of the thinking behind Social Security - that government knows best the "right" way for everyone to spend and save. Even if it were true - and the last 100 years of history prove it's not - it would still be immoral.
Dawn - at least you recognize that Social Security can't survive forever in its current form. If everyone were willing to concede that, it would be easier to move things along.
Posted by: Yaron at January 21, 2005 03:24 PMDawn,
They try that in Europe,work very well.
I blog about the exact same point here.
While I agree with you that there are certainly people who can manage their finances well--present company emphatically included--I think you understate the amount of people who can't manage their money well.
I would like to see a scheme--though I'm not holding my breath--in which financially inclined people such as you and I--can elect to opt out of Social Security entirely, irrevocably, and put the money otherwise paid into the system into privately managed accounts.
I do not buy into the idea, however, that this is a feasible or responsible choice for the majority of people, simply because I don't have faith in the intelligence of the majority. Sorry to crush any conservatives' dream, but it is simply unrealistic to argue for Social Security privatization from the point that people can manage their money better on their own than can government do it for them.
For some people that is a true statement; unfortuantely for all too many of us, it is not. A better argument, as I contend at my blog post is that it is simply moral to let those who wish to do so invest for their own retirement on their own.
Posted by: Dave at January 21, 2005 03:39 PMFDR also promised that social security numbers would never be used for any purpose other than to manage your SS account. The drumbeat of tyranny marches on...
Posted by: Peter at January 21, 2005 03:52 PMYou can call it tyranny if you want, but the entire premise of social security is that people aren't smart enough to manage their own finances.
Maybe it is condescending but the viewpoint was built on a mountain of evidence about the indigent aged and generations of old people turning to dog food for nourishment when they couldn't afford real meat. It isn't just the "stupid" - most of us can't do anything but gamble when we make long term investment decisions. Social security provides a cushion for all of the bad decisions that we may make. Making investing an issue of "responsibility" dodges the reality of well-meaning people who find themselves on the wrong end of the bet in their golden years.
Social security is a valuable safety net. A system that allows everyone private savings accounts seems objectively worse than having no system at all. Maybe that is the point, but I think it would be a horrible end to the best social welfare idea this country has ever had.
Posted by: ugarte at January 21, 2005 04:46 PMI'm not sure why Bush is taking SS as opposed to Medicare/aid, which has increased much more relative to budget. Not to mention, why piss off AARP? I mean, I love to piss off old people, but I don't need their votes.
Also, I'm not sure if private mandatory SS is a good idea. Why take that money from me at all? Because I can't be trusted to take care of my future (which maybe I can't, but is that really the answer)? And, my other concern is, is it possible that with partial privatization, there will actually be more bureaucrocy, and we'll have even bigger government?
None of this addresses the disability insurance side of Social Security. Are we going to blame a 28-year-old who breaks his back for not managing his money well enough to provide himself a safety net for the rest of his life?
Posted by: Auguste at January 21, 2005 08:00 PM
