D o w n s i z e r - D i s p a t c h
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Dear friends,
Ron Paul has strong words and deep convictions about
Social Security reform (as you'll be able to read
below).
But we wonder... what do you think?
People who claim to support free markets and smaller
government have honest disagreements on this subject.
Two libertarians I respect have opposing
perspectives, both grounded in libertarian arguments.
And CATO disagrees with Lew Rockwell and his writers.
Do you support Social Security Reform? If so, what
are the deal-breakers for you? If not, why not?
Feel free to hit Reply and tell us. We can't respond
to all the comments, but we'd like to know what you
think.
Jim Babka
President
DownsizeDC.org, Inc.
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Want to Reform Social Security? Stop Spending.
by Representative Ron Paul, MD (R-TX)
Social Security reform promises to be the biggest
domestic issue this year in Washington, but most of
the proposals are nothing more than flim-flam. The
only honest solution to the future insolvency of the
program is for Congress to stop spending so much
money. Unless Congress makes real cuts in spending--
and stops spending Social Security taxes on
completely unrelated programs-- millions of Americans
simply will not receive even a fraction of the money
they paid into Social Security. Ignore the rhetoric
about tax increases and cuts in benefits, as though
you are to blame for the problem! All Social
Security obligations could be met if Congress did not
spend so much on other things.
In the 1930s, Social Security was presented to the
American people as a social insurance program, with
individuals paying a monthly "premium" in exchange
for retirement benefits later. It was supposed to be
a forced savings program, based on the assumption
that some people would be unable or unwilling to save
for their older years. Seven decades later, however,
the ratio of younger working people to older retirees
has changed dramatically, exposing the Ponzi-like
congressional raid on the system itself. What has
not changed, however, is our willingness to accept
the notion that the government should force us to
save for our older years.
Notice that neither political party proposes letting
people opt out of Social Security, which exposes the
lie that your contributions are set aside and saved.
After all, if your contributions really are put aside
for your retirement, the money will be there earning
interest, right? If your money is put away in a
trust fund account with your name on it, what
difference would it make if your neighbor chooses not
to participate in the program?
The truth, of course, is that your contributions are
not put aside. Social Security is simply a tax.
Like all taxes, the money collected is spent
immediately as general revenues to fund the federal
government. The Social Security trust fund does not
exist, and Social Security "surpluses" are nothing
more than an accounting ledger showing that
contributions exceeded benefits paid for a given
calendar year-- not that the excess was put aside.
Social Security benefits are paid each year from
general funds, like other federal programs. Since
these programs and overall spending keep increasing,
the government can't give up any sources of tax
revenue. Allowing people to opt out of Social
Security would force the federal government to admit
it has been stealing money from Social Security for
decades.
The administration speaks of private accounts, but
government-managed investment of Social Security
funds is not privatization at all. True capitalism
by definition operates without government
interference, and we should oppose further government
involvement in the financial markets. After all,
which government officials will decide what stocks,
bonds, mutual funds, or other investment vehicles are
approved? Which politicians will you trust to decide
what your portfolio may contain? Imagine the
lobbyists fighting over which special interests will
have their favored investments approved for Social
Security accounts. Political favoritism, rather than
market performance, will determine what investments
are allowed, and Social Security in essence will
become a huge source of taxpayer-provided investment
capital.
If the administration truly wants to give people more
control over their retirement dollars, why not simply
reduce payroll taxes and let them keep their own
money to invest privately as they see fit? This is
the true private solution.
Your money has never been safe in the government's
hands, and it never will be. Governments spend
money; it's just their nature. It is preposterous to
believe our government is capable of simply sitting
on a huge pile of money without touching it because
it's earmarked for one purpose or another. No matter
what politicians promise, Social Security reform will
not change the fact that your money is taken from
your paycheck and sent to Washington, where it will
be spent.
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D o w n s i z e r - D i s p a t c h
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"The Purpose and Limits of Government,"
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