Archive for April 23rd, 2007

Are you Pro-Choice? (on Retirement Planning)

social-security-protest.jpg The beat goes on.  After decades the political apparatus in this country has continued to fail concerning the bankrupt and obsolete retirement system.  I read posts and hear speeches and sermons about how little people have to live off from their “Social Security” checks and what is a “caring and socially conscience society” going to do about it (on both the corporate and individual level), but I never hear the socially aware say anything about the fact that the original proponents of the Social Security System designed it to be a “supplement” to retirement income and never expected to be a full retirement system, but you have heard that before.  They still continue to ignore this because of the greater problem of caring for the elderly (which I am rapidly approaching myself, but no faster than you, just probably much closer) and the impact on society of ignoring it.  If this is a boring topic for you, think again, this will indeed affect you adversely more and much more than you would ever believe and the younger you are (and farthest away from retirement) the greater the negative impact will be. The problem is the solution has been taken off the table by the left and made the “3rd Rail” in American politics.  This is not an unintended consequence of the debate, but a carefully crafted strategy of the politically left (including anarchists, Socialists, Communists, many Democrats, few Republicans and a lot of people on the receiving end of entitlements) looking to extend their political power thru lies and fear.  What should be FEARED is the lefts inability to deal with the real problem. 

     Lets put one thing to rest.  The Social Security System is largely a government handout.  I know that you continue to hear the retirement community talk of this system as though they paid for it (for all these years) and are entitled to it “so don’t mess with it.”  Well it is not true, even a lie.  When I entered the workforce and began contributing to the retirement system, it was a very small percentage of your income based as a factor against only $3,500 of your payroll.  Without running the numbers I would say that most people on Social Security are way beyond their contribution and the contribution on their behalf by their employers including some factor for imputed interest.  This is truly a tax on the working class that can’t even afford to adequately fund their own 401-K’s, IRA’s and savings for children’s education, etc.  This is a tax that will eventually become an intolerable burden on the youth of this country.  Whatever pain we must be endured to fix it will only get worse as time goes on.  Failure to act is an affirmative action of worsening the problem

     The left takes these same points and forms a disingenuous argument for “higher taxes on the rich” and singing the mantra that the wealthy aren’t paying their fair share, blah…blah….blah (see The Dinner Lesson).  This is divisive politics that even if implemented would certainly exacerbate the problem exponentially.  (In short the system is going to claim such a large portion of the resources of the country you would never be able to tax your way out of it even if you confiscate the entire wealth of the top 2%, 5%, 10% or whatever.)  The only system that will work for the people that need the retirement money and the people that are providing it is a solution that both provides for a “growing” economy and “participates” in it.  [Isn’t that obvious?]. 


     Start with this, history has proven time and again (though denied by political opportunists from the left) that low taxes stimulate growth in the economy (most recently by the Bush tax cut that revived us from the Clinton recession when the left predicted that it would make things worse).  Ok, then what else can we do …….?   By changing the retirement system to one that allows the capital of the Social Security savings pool be invested in corporate America on an individual account basis.  Oh no, he said the dirty “C” word.  Well listen to this …. Hello, if Corporate America fails so will the government sponsored Social Security System.  I dare you to show me one person that can sanely argue that we can solve our Social Security problem by taxing our way out of it even in the face of a failing corporate system (i.e. capitalism).  If Americans, especially the American youth, can control their own retirement and put the money in the stock market they not only can but will have more retirement than even the most optimistic hopes for the Social Security System, including the lefts fatuous scheme to tax us out of the problem. (Actually I believe their rhetoric on this is mainly a get out the vote program for liberals).    


     The left would have you believe that this is a risky proposition and they come on with that every time the stock market takes a dip and say that your 401-K just went down, look what would happen to your retirement if the Republicans were in control.  A notable and recent example is the Stock Market fall off that started during the Clinton administrations final year culminating with the Clinton recession and 911.  Congress passed the Bush tax cut that delivered this country from the last recession and has built a strong economy, all while the Democrats were kicking, screaming and lying.  The real risk is the foreseeable disaster from not acting.  There is zero possibility that the funds will be there if we don’t fix the system and soon.  It is equally true that trying to solve the problem through taxes will ultimately transfer a burden on the youth where every worker will be taxed in an amount to support 3, 4 or more retirees.  Just look at the baby boomer bubble and draw your own conclusions.  So we are dependent on corporate America whether we favor the Government bankrupted Social Security System or private investment accounts (in lieu of the government system).  If corporate America fails, so will the stock market as well as government controlled pension (who do you think will provide the money for Social Security if corporate America fails?).  So corporate America (i.e. Capitalism) is the only option we have to solve the problem and lying to the American public isn’t going to solve anything.  Both the stock market and the Social Security System  are dependent on the growth of the economy and inextricably tied together.


     But corporate America won’t fail to deliver ………. why you ask?  The answer is because of population demographics.  As the population grows, also does the need for goods and services that will be provided by corporate America.  The difference is whether we want Americans to participate in the “profits” from their expenditures or merely the corporations.   Over my life I have heard repeated complaints about risking investment money in the stock market by the left, but you can pick literally any point in American stock market history when you might have invested money and today it would be higher than ever before and greatly higher than the COLA (cost of living adjustments) of the Social Security System (that is bankrupting it).  You don’t believe it?  Take your pick of entry points.  So history shows that the left is not merely often wrong about this but that they have been wrong every time, but they never seem to learn from their error which is why I believe they do so to control you by controlling your security. 


     In short our only way out of the retirement/Social Security mess is through individual accounts in lieu of government controlled Social Security, even if mandatory.  The risk of the Social Security System failing is far greater than that of the economy of the country because it itself is dependent on it.  You should at least be given the choice as to your own retirement future.  So become Pro Choice for retirement and tell someone, preferably your Congressman!

April 2007
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