Having read and listened to varied discussions on the Social Security issue, I would now like to offer my solution. But aside from stating my contempt for the politicians who insist that there is no crisis so they can attack other politicians who want to face it and deal with it responsibly, I'll have to get back to you on the final details.
I heard my first debate about privatization of Social Security at a National Taxpayers Union conference many years ago, unfortunately during the period of the savings and loan scandals. I initially thought it was a crazy idea. It seemed obvious that if people invested their money unwisely and were therefore unable to take care of themselves in their old age, the government would have to step in and take care of them anyhow. So why pretend that these would be real investments — that by their nature involve risk — if in the end, no one could lose?
Knowing this, I feared, people would invest in all kinds of wild schemes, hoping for the big killing, knowing that politicians, terrified as many of them are of the AARP, wouldn't let them starve if the investments fell through.
Well, the concept has been refined since then. President Bush's present proposal would allow only part of one's Social Security payment to be invested privately, and this in only safe vehicles. Even relatively low returns would be better than getting no interest at all from our forced Social Security payments, and losing it all if we die before we can collect.
Which reminds me: My first reaction to the privatization concept was not the first time I was wrong about Social Security. When I was young and ignorant, I actually believed that the money that was taken from my employer and my paycheck each week was being set aside by the federal government, accruing interest somewhere in an account named "Barbara's."
Of course, I also thought that there would be enough in that account to cover my old age, which the young me could barely imagine arriving, never mind lasting for any extended period of time. Now as I get annual statements from the Social Security Administration, I realize that if I were to retire at 62 (impossible because Medicare isn't available until 65), my $1,000 a month would eat up the roughly $100,000 paid in by myself and various employers in about eight years.
If I'd been allowed to invest some of it, the interest might give me a few more years before I'd be on Social Security welfare — not counting the fact that the $24,000 I and my employer have paid into the Medicare fund would probably be depleted by the first hospital stay. Next I'll throw in the other taxes I've paid for government spending of which I don't approve, that I figure someone owes me, and maybe I could live guilt-free, well into my 70s, without mooching off future generations.
Then, if I didn't have grandchildren, I'd figure, what the heck: Though I never lobbied for unearned benefits, I'll cheerfully take them, as I take advantage of other government programs I didn't ask for but the majority of citizens seem to support. But now that I know that my own beloved twins will have to pay to keep me economically solvent, while also paying for the national debt, and without any hope of getting Social Security benefits of their own, I feel bad.
Which, biologically, is how I'm supposed to feel; my genes want their continued survival through my grandchildren, who may not be able to afford to have kids of their own. So what is it with the AARP, which is already opposing any Social Security reform that would give young people a chance to own their own security? This total lack of concern for future generations is somehow abnormal, especially since Bush's plan would keep the present system for all of us over 55.
My son, the anti-Bush, Democratic voter, is also the twins' daddy. Warning, Democrats! He is not happy with your denial of the problem and refusal to deal with it. Sending your alleged leaders forth to chant "risky investment scheme, tax cuts for the rich, and blah-blah-blah-big-corporations" is not going to work this time.
There is no lockbox, and never was. The Social Security system has been heading for bankruptcy for a long time. Bush laid it out for us in his State of the Union message: By 2018 the amount due beneficiaries will be more than the amount collected from present workers. By 2042, probably sooner, today's "surplus" will be gone.
Allowing young workers to own part of their Social Security retirement funds won't hurt present and near retirees — who in gratitude should stop demanding more at the expense of the children — but will assure that my grandchildren get something back.
The hard part will be dealing with an increase in the national debt during the transition. But although this will be difficult and costly, doing nothing will eventually cost much more, and should not be an option.
Barbara Anderson is executive director of Citizens for Limited Taxation. Her syndicated columns appear weekly in the Salem
News and Lowell Sun; bi-weekly in the Tinytown Gazette; and occasionally in the Providence
Journal and other newspapers.