I don't know that I have been articulating my feelings about Social Security well enough. I recently read a piece from The Washington Post that put the main issue for me into stark relief.
This is a new order with new givens. Paugh and his co-workers came of age as Democrats who felt protected by their union, their party and their government. His grandchildren are all registered Republicans who feel largely on their own in a world full of risks and responsibilities, and no guarantees. They are willing to give Bush's Ownership Society a try, saying they have no hope that government or employers can or will protect them.
My generation does not live in a world where employers actually take care of their employees. Nowadays employees are merely resources to be consumed like any other resource. We live in a world of acquistions and mergers where the outcome almost never benefits anyone but the "ruling class," the overpaid corporate executives. Even if an employee isn't "downsized" outright, benfits rarely improve, and are often cut back as companies keep a sharp eye on the bottom line. Pensions have gone the way of the dinosaur. A few companies still offer them, but who really stays at a job for 25 years anymore? Even assuming some would want to stay that long, how many times of we heard of someone being laid off right before retirement and losing their pension?
Dan's wife, Joyce, took the same hit in 2001 when her job at Lockheed Martin was eliminated after 21 years. She has since found work at a machine shop, but without a comfortable pension, she said, "It feels like I'll have to work till I die."
Unlike many people my age, I went to a work for a company right out college and stayed there for 9.5 years. It is likely that I would be there still, except that we were acquired by another company who eventually ran the business into the ground and ended up letting all the orginal employees of the company go to cut costs. Three times in that 9.5 years I watched theoretical nest eggs evaporate. The first time was during the first acquisition when my stock that I owned in the company was bought out and then taxed as income instead of capitial gains, meaning Uncle Sam, who is supposedly my ally, helped himself to over half of it. Twice I watched a few thousand worth of stock options become worthless over night because the strike price was higher than their current street value, and—thanks to another buyout the first time and getting laid off the second time—I was given 90 days to excercise them or lose them. So I would have actually had to pay my company for my "compensation package."
In this world of Enron, World Com and Untied Arilines is it any surprise that many people of my generation will not trust their retirement to anyone's good faith? Is it any surprise that I do not believe anyone on Capitol Hill has my interests at heart? The wealthy men on Captiol Hill cover their own asses, free to give themselves a raise whenever it suits them and give themselves pensions and lifetime benefits for as little as 2 years of service. When it comes to helping out the poor, do they take money out of their own pockets? Hardly, they take it out of mine. If there is anything my generation has learned it is that no one is watching out for their finacial well being. If they don't do it themselves, no one will.
On a recent day, when Pamela's 11-year-old Ford Probe broke down, Junior Paugh made the hour-long drive to pick her up and take her to work. A starker contrast in two people's relationship to their government and employers would be hard to conjure.
Here was Junior Paugh at the wheel of his silver Buick LeSabre, having moved out of poverty, into the middle class, and now a secure retirement, with the help of one employer and his government. And here, only two generations behind him, sat Pamela Cody, feeling abandoned by everything her grandfather valued.
Just read still another article on Social Security. I really have no idea what we should do with Social Security and frankly I'm starting not to care. Here's the long and the short of my feelings on Social Security.
I resent it. Period. The debate is raging about IOUs and faith in our government to repay their debts. You have to believe that Social Security is going to be of any use to you before you can even care if the government will pay the debt back or not. I don't. By the time I retire, I fully expect Congress to have spent all surplus cash and to still be relying on current tax revenues to fund payments. In order to do that they will have to keep raising the "retirement" age to the point that I will want to retire 10-15 years before I'm eligible for benefits. Not to mention benefits will also have to be reduced.
People used to talk about Social Security as a retirement plan. As a retirment plan it is a waste of my money because I can get a better return on my investment elsewhere. But it's not a retirement plan. It never has been. It doesn't even come close.
People seem to have started talking about it as "poverty insurance," in which case it becomes merely another necessary evil along with medical insurance and people should feel free to bitch about feeling powerless in the face of rising poverty insurance premiums accompanied by reductions in benefits just as they do with medical insurance. Nor should people expect "poverty insurance" to keep them above the poverty line anymore than they expect medical insurance to cover all medical expenses. A major illness can still bankrupt you. I've seen it happen twice in my own family.
If we're calling it insurance now, Democratic complaints about turning Social Security into a welfare program lose all traction and W's progressive indexing becomes highly offensive. According to his proposal you actually collect fewer benefits for paying higher premiums. No one would begin to claim that our current medical insurance industry is friendly or equitable and many believe it only barely useful, but at least there if I pay a higher premium I get better coverage.
Pick one people. Either it's a retirement plan, in which case I want more out of that 6.25% of my income the government is helping itself to, or it's an insurance plan, in which case, I want it to cover my ass based on needs I have at the time, not based on needs they decide I will probably have 20 years from now. I don't really care which.
A left leaning friend of mine has been trying to educate me on the Social Security dilemma. OK. He's not left leaning. If he leaned any more left he'd fall over. His issue with progressive indexing is a social one. Currently Social Security is a universal program. Everyone pays in. Everyone gets benefits. Implementing progressive indexing would essentially turn it into a welfare program and likely breed resentment from the middle class who would once again get the shaft. (One of these days I'll have to tell you my quintessential story of the middle class getting screwed over.) OK. I get that. I'll even get on board with that. Progressive indexing is not a great idea.
I don't know what the solution is. I rather think there wouldn't be a problem if Congress hadn't spent all the excess money and left the well dry. Talk about the fox guarding the chickens. And people wonder why I don't trust the government with my money.
I still don't understand the resistance to the idea of creating real wealth for people. Left-wing progressive types don't seem to have fundamental issues with wealth. The Kennedys and the Heinz-Kerrys seem to fit in just fine with that crowd. They just seem to have a problem with other people acquiring wealth. Maybe because they lack the enlightened understanding of how to hoard it properly? It's not like anyone is going to get rich off Social Security.
I understand some of the reservations about a 401K type plan. I recently read about an idea that would simply convert some of the money put into Social Security in to treasury bills. Treasury bills are as safe as the IOUs that people are currently putting their faith in. The two big differences are: T-bills actually have market value and get a little better ROI than Social Security will provide, and Congress won't be able to spend that money on anything else since it would belong to individuals and not the government. That sounds like a good idea to me.
Of course, if Congress can't spend Social Security surpluses, they'll just find some other way to purloin my pocket book, so maybe the point is moot.
I'm getting really tired of all the pissing and moaning on the left about Social Security reform. I'm not talking about the "is it broke and need to be fixed" debate (though it seems that the left wants to fix the "nonexistent" shortfall problem in the usual manner—raise taxes.) No, what really irritates me is their insistence that Social Security is a retirement program. Call it what it is people. It's wealth redistribution, plain and simple. The money I put into the system is not my money anymore. You're simply taking money from those who are working and giving it to those who aren't. This works great when there many are more workers than retirees. So great in fact, that politicians feel justified in using the excess money elsewhere. It has some minor logistics problems when the ratio of workers to retirees starts to drop.
So why all the gas over progressive indexing? Isn't that the left's standard approach to economics, tax the rich to pay for programs to support the poor? I also don't understand the resistance to diverting some of Social Security into an actual retirement account. Fear tactics about losing money in the stock market are disingenuous. You think those politicians on Capitol Hill earning six figures don't have any of their money in the stock market because it's too risky? I don't know enough on the subject to talk about administration costs, but it seems like the left would jump at the chance to create real wealth for the working poor. But that's not what this is about. Basically the left believes the poor are too dumb to manage their own money and wants to keep them dependant on the government. Yes, there are some who will squander whatever money they get their hands on. I tend to believe there are many more who are responsible, hard working individuals who just need a break.
Don't get me wrong, I'm not opposed to the wealthy lending a hand to those less fortunate. I mean come on, Bill, how many billions do you really need? I'm just tired of a left who cannot get their story straight, cannot articulate any real plan beyond pissing off Republicans and then wonder why they are taking such a beating at the polls.