Tag: Social Security
Social Security is On an Unsustainable Path
Since 1985, the Social Security Board of Trustees has been warning elected officials that there won’t be enough revenue collected in the next few decades to cover expenses. Sean Williams of The Motley Fool highlighted several points of concern for Social Security.
Put simply, Social Security’s asset reserves will dry up and a significant cut in benefits will have to be made to keep the current payout system going. In a recent report, the Trustees project depletion of Social Security’s $2.9 trillion in asset reserves by 2035, which could potentially lead to a 23 percent cut in benefits for retired workers. Indeed, with more baby boomers leaving the workforce, more pressure will be placed on the program as Social Security payouts increase.
The Social Security Act was passed in the middle of the Great Depression in 1935. The rationale behind its passage was that a significant portion of the population would not be able to accumulate enough savings into old age. In turn, the government needed to step in to provide somewhat of a retirement baseline for the elderly and individuals not capable of staying in the workforce for prolonged periods of time.
Williams provides some solid context as to why Social Security is on the ropes. When the Social Security Act was signed into law in 1935, the average life expectancy for an American was about 62 years. Today, the average American life expectancy is about 78.6 years, representing a 16-year increase in longevity since the act was passed over 80 years ago.
Longevity is a great thing. Being able to see loved ones into old age is one of the greatest achievements of modern development. However, because of increased life expectancy, our social security system has been forced to adjust. Social Security’s full retirement age — the age when a retired worker is eligible to receive all of their benefits according to their birth year — will have been raised ten times in the past 85 years by 2020.
By 2022, these trends would point to a two-year increase in the retirement age (from age 65 to 67). Essentially, a program that was initially created in the 1930s to provide payments to individuals for possibly a few years to a decade at most is now being used by retirees to collect payments for two decades, or even longer. With medical advancements improving by the year, people are living longer, thus allowing them to collect these benefits for longer periods of time.
Similarly, declining birth rates in America are putting Social Security on the ropes. With fewer workers to support Social Security beneficiaries, the system is bound to eventually go bust. These macro factors will put tremendous pressure on the current system, which will necessitate a strong overhaul.
The more just path forward is to let the people who have paid into the system receive their benefits and then transition into a more private system where younger workers can opt out and have actual savings options in the market.
Social Security is a relic of the New Deal-era when the federal government expanded beyond its intended scope of constitutional governance. This was no spontaneous development. It was the logical result of the previous Progressive Era when central banking and the income tax became fixtures in the American political economy and enabled the government to grow at extraordinary rates.
Some people think that phasing out Social Security will lead to chaos. However, U.S. history has shown that Americans are industrious people capable of building mutual aid societies to provide non-state welfare services for those who would otherwise slip through the cracks. This was how America operated before the New Deal.
Younger generations would be wise to read up on this history. In it, they will find the keys to prepare themselves for a future where they will not be able to collect the same level of Social Security benefits as their parents and grandparents did. The good news is that the voluntary mechanisms of mutual aid arrangements can lay the groundwork for an economic renaissance like never before. It’s just a matter of breaking free from the notion that the state has to be responsible for providing welfare services.
Put simply, Social Security’s asset reserves will dry up and a significant cut in benefits will have to be made to keep the current payout system going. In a recent report, the Trustees project depletion of Social Security’s $2.9 trillion in asset reserves by 2035, which could potentially lead to a 23 percent cut in benefits for retired workers. Indeed, with more baby boomers leaving the workforce, more pressure will be placed on the program as Social Security payouts increase.
The Social Security Act was passed in the middle of the Great Depression in 1935. The rationale behind its passage was that a significant portion of the population would not be able to accumulate enough savings into old age. In turn, the government needed to step in to provide somewhat of a retirement baseline for the elderly and individuals not capable of staying in the workforce for prolonged periods of time.
Williams provides some solid context as to why Social Security is on the ropes. When the Social Security Act was signed into law in 1935, the average life expectancy for an American was about 62 years. Today, the average American life expectancy is about 78.6 years, representing a 16-year increase in longevity since the act was passed over 80 years ago.
Longevity is a great thing. Being able to see loved ones into old age is one of the greatest achievements of modern development. However, because of increased life expectancy, our social security system has been forced to adjust. Social Security’s full retirement age — the age when a retired worker is eligible to receive all of their benefits according to their birth year — will have been raised ten times in the past 85 years by 2020.
By 2022, these trends would point to a two-year increase in the retirement age (from age 65 to 67). Essentially, a program that was initially created in the 1930s to provide payments to individuals for possibly a few years to a decade at most is now being used by retirees to collect payments for two decades, or even longer. With medical advancements improving by the year, people are living longer, thus allowing them to collect these benefits for longer periods of time.
Similarly, declining birth rates in America are putting Social Security on the ropes. With fewer workers to support Social Security beneficiaries, the system is bound to eventually go bust. These macro factors will put tremendous pressure on the current system, which will necessitate a strong overhaul.
The more just path forward is to let the people who have paid into the system receive their benefits and then transition into a more private system where younger workers can opt out and have actual savings options in the market.
Social Security is a relic of the New Deal-era when the federal government expanded beyond its intended scope of constitutional governance. This was no spontaneous development. It was the logical result of the previous Progressive Era when central banking and the income tax became fixtures in the American political economy and enabled the government to grow at extraordinary rates.
Some people think that phasing out Social Security will lead to chaos. However, U.S. history has shown that Americans are industrious people capable of building mutual aid societies to provide non-state welfare services for those who would otherwise slip through the cracks. This was how America operated before the New Deal.
Younger generations would be wise to read up on this history. In it, they will find the keys to prepare themselves for a future where they will not be able to collect the same level of Social Security benefits as their parents and grandparents did. The good news is that the voluntary mechanisms of mutual aid arrangements can lay the groundwork for an economic renaissance like never before. It’s just a matter of breaking free from the notion that the state has to be responsible for providing welfare services.
Social Security is Broke — Any ‘Fix’ is a Joke
Social Security is going bust, a report released by trustees of the federal government’s entitlement programs claims. And without more money being poured into the system, the report argues, tens of millions of Americans will receive only three-quarters of their Social Security benefits in the near future. But even if trustees hadn’t figured that out by now, you would have known this was bound to happen. Unless you never heard any Austrian economist explain why Social Security is nothing but a Ponzi scheme.
According to the trustees, Social Security’s funds will be tapped out by 2035, meaning that this generation of working men and women may never see a dollar from what they “invested,” forcefully, over the years. In order to fix this problem and make Social Security solvent again, the report urges lawmakers to act.
“Lawmakers have a broad continuum of policy options that would close or reduce the long-term financing shortfall of” Social Security and Medicare, Treasury Secretary Steven Mnuchin, Health and Human Services Secretary Alex Azar, and other trustees wrote in their report to Congress.
Options include hiking up taxes and slashing benefits, two policies that seldom find any support from elected officials on both sides of the aisle. As such, it’s clearly impossible to work on any Social Security “reform” that will actually help to prevent it from falling apart.
But is there any way that Social Security can be actually saved?
“Lawmakers have a broad continuum of policy options that would close or reduce the long-term financing shortfall of” Social Security and Medicare, Treasury Secretary Steven Mnuchin, Health and Human Services Secretary Alex Azar, and other trustees wrote in their report to Congress.
Options include hiking up taxes and slashing benefits, two policies that seldom find any support from elected officials on both sides of the aisle. As such, it’s clearly impossible to work on any Social Security “reform” that will actually help to prevent it from falling apart.
But is there any way that Social Security can be actually saved?
Abolish Social Security
President Trump thought he wouldn’t have to do anything to the entitlement program. As a matter of fact, he claimed that his plans were going to boost the economy enough that Social Security’s problems would be easily solved. But the U.S. government has long been in debt. Quite deeply, as a matter of fact. As a result, money is not being put aside in some special fund for Social Security. What the government runs on is borrowed and printed cash, as the Federal Reserve keeps postponing its plan to slow down on the expansion of its balance sheets. But as the number of Americans who are 65 or older is expected to grow by a third between now and 2040, the cost of Social Security will continue to rise. Considering that the program both undermines economic prosperity and damages the average American’s relationship with money by giving beneficiaries incentives to remain dependent on the government, ending it shouldn’t be a tough call. Especially knowing it will no longer be capable of fulfilling its obligations in the coming future. But Social Security still has friends in high places. It is thanks to big businesses and their connection with the government that we have the program in the first place. After all, if President Franklin D. Roosevelt hadn’t listened to hot shots at the time, who were upset smaller businesses were not giving employees retiree pensions, the federal government may have not been used to force everyone to pay for similar programs. As Murray Rothbard put it, Social Security didn’t hurt big, established firms but their competitors, as the program “penalizes the lower cost, ‘unprogressive’ employer and cripples him by artificially raising his costs compared by the larger employer.” Unfortunately, not many Americans see the program this way. With generations relying on the failed system over the years, it is certain we won’t see any politicians doing much to gut it. But hopefully, Americans will finally refuse the system once they learn it is both ineffective and based on policies that benefit big corporations on the expense of the little guy. What’s not to hate about such a dysfunctional scheme?They Said It with John Boehner, Gary Johnson, and MORE
(From the They Said It section in Volume 20, No. 13 of the Liberator Online. Subscribe here!)
U.S. COVERED UP GASSING OF AMERICAN TROOPS: “During and immediately after the first Gulf War, more than 200,000 of 700,000 U.S. troops sent to Iraq and Kuwait in January 1991 were exposed to nerve gas and other chemical agents. Though aware of this, the Department of Defense and CIA launched a campaign of lies and concocted a cover-up that continues today. A quarter of a century later, the troops nearest the explosions are dying of brain cancer at two to three times the rate of those who were farther away. Others have lung cancer or debilitating chronic diseases, and pain. More complications lie ahead. According to Dr. Linda Chao, a neurologist at the University of California Medical School in San Francisco, ‘Because part of their brains, the hippocampus, has shrunk, they’re at greater risk for Alzheimer’s and other degenerative diseases.'” — journalist Barbara Koeppel, “U.S. Nerve Gas Hit Our Own Troops in Iraq,” Newsweek, March 27, 2015.
BARACK OBAMA, PEACENIK-IN-CHIEF:
“The world is starving for American leadership. But America has an anti-war president.” — U.S. Speaker of the House John Boehner (R-OH) during a Capitol Hill press conference, March 26. Apparently Obama’s ongoing U.S. military operations in Iraq, Afghanistan, Libya, Syria, Yemen, Somalia and Pakistan — not to mention covert operations around the world — slipped Rep. Boehner’s mind.
U.S. FOREIGN POLICY IN ONE TWEET: “US praises US ally for bombing US-equipped militia aligned with US foe who is partnering with US to fight another US-equipped militia.” — tweet by journalist/photographer Gregg Carlstrom, sent as Saudi Arabia began bombing Yemen, March 26, 2015.
YOU’RE ENTITLED (TO PAY FOR ENTITLEMENTS): “Your 2014 tax dollars — which are due [this] month — went primarily to pay for government benefits. Major entitlements (Medicare, Medicaid, Obamacare and Social Security) devoured more than half of the 2014 budget at 51 percent of spending. Other federal benefits took another 19 percent, meaning that 70 percent of government spending went to pay some sort of benefit to someone. These additional ‘income security’ and other benefits include federal employee retirement and disability, unemployment benefits, and welfare programs such as food and housing assistance.” — economist Romina Boccia, “The Breakdown of Where Your Tax Dollars Go,” Heritage Foundation, March 17, 2015.
THE MARIJUANA DISCONNECT: “Marijuana polls 60% in favor of legalization. Huge, insane, disconnect that the minority is maintaining criminal penalties for the majority!” — tweet by Gary Johnson, 2012 Libertarian Party presidential candidate, March 5, 2015.
LET THEM BAKE — OR NOT BAKE — CAKE: “Nobody should be forced to do something they don’t want to do, whether it’s bake cakes for gay weddings or decorate cakes with anti-gay slurs. To me, whether a person’s or a business’s decision is based in religion is immaterial.” — Nick Gillespie, “Everybody’s Lost Their Goddamn Mind Over Religious Freedom,” The Daily Beast, April 1, 2015.
“The world is starving for American leadership. But America has an anti-war president.” — U.S. Speaker of the House John Boehner (R-OH) during a Capitol Hill press conference, March 26. Apparently Obama’s ongoing U.S. military operations in Iraq, Afghanistan, Libya, Syria, Yemen, Somalia and Pakistan — not to mention covert operations around the world — slipped Rep. Boehner’s mind.
U.S. FOREIGN POLICY IN ONE TWEET: “US praises US ally for bombing US-equipped militia aligned with US foe who is partnering with US to fight another US-equipped militia.” — tweet by journalist/photographer Gregg Carlstrom, sent as Saudi Arabia began bombing Yemen, March 26, 2015.
YOU’RE ENTITLED (TO PAY FOR ENTITLEMENTS): “Your 2014 tax dollars — which are due [this] month — went primarily to pay for government benefits. Major entitlements (Medicare, Medicaid, Obamacare and Social Security) devoured more than half of the 2014 budget at 51 percent of spending. Other federal benefits took another 19 percent, meaning that 70 percent of government spending went to pay some sort of benefit to someone. These additional ‘income security’ and other benefits include federal employee retirement and disability, unemployment benefits, and welfare programs such as food and housing assistance.” — economist Romina Boccia, “The Breakdown of Where Your Tax Dollars Go,” Heritage Foundation, March 17, 2015.
THE MARIJUANA DISCONNECT: “Marijuana polls 60% in favor of legalization. Huge, insane, disconnect that the minority is maintaining criminal penalties for the majority!” — tweet by Gary Johnson, 2012 Libertarian Party presidential candidate, March 5, 2015.
LET THEM BAKE — OR NOT BAKE — CAKE: “Nobody should be forced to do something they don’t want to do, whether it’s bake cakes for gay weddings or decorate cakes with anti-gay slurs. To me, whether a person’s or a business’s decision is based in religion is immaterial.” — Nick Gillespie, “Everybody’s Lost Their Goddamn Mind Over Religious Freedom,” The Daily Beast, April 1, 2015.
Why Did Our Ancestors Approve the Constitution?
(From the Activist Ammunition section in Volume 20, No. 8 of the Liberator Online. Subscribe here!)
Here’s a provocative thought experiment from Jacob G. Hornberger, president of The Future of Freedom Foundation. In a recent article “Why Did Our Ancestors Approve the Constitution?” Hornberger poses this question:
“Suppose our American ancestors in 1787 had been told that the proposed Constitution, which they were being asked to approve, was going to bring into existence a federal government that would have the following powers:
Here’s a provocative thought experiment from Jacob G. Hornberger, president of The Future of Freedom Foundation. In a recent article “Why Did Our Ancestors Approve the Constitution?” Hornberger poses this question:
“Suppose our American ancestors in 1787 had been told that the proposed Constitution, which they were being asked to approve, was going to bring into existence a federal government that would have the following powers:
- The power to tax people’s incomes in any amount government officials deemed appropriate.
- The power to regulate people’s economic activities.
- The power to incarcerate and fine people for ingesting harmful substances.
- The power to round people up and incarcerate them indefinitely without trial by jury and due process of law.
- The power to torture people.
- The power to assassinate people.
- The power to invade foreign countries and wage wars of aggression against them.
- The power to establish military bases in foreign countries.
- The power to take money from people and give it to others.
- The power to secretly spy on people and monitor their activities.
- The power to incarcerate and fine people for spending money in other countries.
- The power to make paper money the official money of the United States.
- The power to control and regulate gun ownership.
The Coming Government Debt Explosion — and How to Deal with It
(From the Activist Ammunition section in Volume 20, No. 6 of the Liberator Online. Subscribe here!)
The U.S. ship of state is sailing full steam ahead — straight toward a massive debt iceberg. 
Here are some genuinely shocking figures from “Medicare and Social Security Tabs Coming Due,” an article by Michael Tanner, senior fellow at the Cato Institute, in the March 2015 issue of Reason magazine:
Here are some genuinely shocking figures from “Medicare and Social Security Tabs Coming Due,” an article by Michael Tanner, senior fellow at the Cato Institute, in the March 2015 issue of Reason magazine:
- The national debt recently reached $18 trillion — approximately 101 percent of the United States’ GDP.
- The Congressional Budget Office projects the debt will rise to $27.3 trillion within the next decade.
- But those numbers are actually far too low — because they ignore Social Security and Medicare’s unfunded liabilities. Add those in, and the national debt hits $90.6 trillion.
- Social Security, Medicare and Medicaid are responsible for fully 47 percent — nearly half — of federal spending, and they continue to grow.
- Social Security has a $24.9 trillion shortfall, while Medicare has $48 trillion in unfunded liabilities. Should healthcare costs rise, the Medicare figure could soar to $88 trillion.
- Just this year, Social Security will have a $69 billion cash-flow deficit. Every year after, that shortfall will worsen. And Medicare is in even worse financial shape than Social Security.
New Study: Minimum Wage Hurts Low-Skilled Workers
(From the Activist Ammunition section in Volume 19, No. 25 of the Liberator Online. Subscribe here!)
A new paper from the National Bureau of Economic Research brings new weight to the argument that significant minimum wage increases hurt the very people they are intended to help — low-skilled workers, especially teens and minority workers.
Economists Jeffrey Clemens and Michael Wither examine the effects of the minimum wage increases in 2007, 2008 and 2009. They find that minimum wage increases have three devastating effects upon low-skilled workers: “minimum wage increases reduced the employment, average income, and income growth of low-skilled workers over short and medium-run time horizons.”
The study indicates that the minimum wage can keep low-skilled workers from moving up to a middle class income; such workers experience “significant declines in economic mobility.” Charles Hughes of the Cato Institute explains:
“Many of the people affected by minimum wage increases are on one of the first rungs of the economic ladder, low on marketable skills and experience. Working in these entry level jobs will eventually allow them to move up the economic ladder. By making it harder for these low-skilled workers to get on the first rung of the ladder, minimum wage increases could actually lower their chances of reaching the middle class.”
Adding weight to these findings is a report earlier this year by the non-partisan federal Congressional Budget Office estimating that a three-year phase in of a $10.10 federal minimum wage option would reduce total employment by a stunning 500,000 workers.
Diana Furchtgott-Roth, former chief economist of the U.S. Department of Labor, nicely summed up at MarketWatch the massive problems created for low-skill workers by the minimum wage:
“Minimum-wage laws criminalize low-skill work. Imagine being forbidden to work. That is the case for people with skills under $8.25 an hour. The federal hourly minimum wage is $7.25, and additional costs, such as Social Security, unemployment insurance, and workers compensation bring the cost of employment closer to $8.25. The minimum wage is one reason why the teen unemployment rate is 18%, the youth (20 to 24) unemployment rate is 11%, and the African-American teen unemployment rate is 28%. Those groups have markedly lower skills than average. …
“When the minimum wage is set above someone’s skill level, that person is left on the sidelines. If people cannot get their first job, how can they get their second or third? People who take minimum-wage jobs gain entry to the professional world. Once they are in, they can keep rising.”
A short, highly readable summary of the negative effects of the minimum wage is the 2004 booklet “Minimum Wage, Maximum Damage: How the Minimum Wage Law Destroys Jobs, Perpetuates Poverty, and Erodes Freedom” by Jim Cox, published by the Advocates and available at our online Liberty Store.
Economists Jeffrey Clemens and Michael Wither examine the effects of the minimum wage increases in 2007, 2008 and 2009. They find that minimum wage increases have three devastating effects upon low-skilled workers: “minimum wage increases reduced the employment, average income, and income growth of low-skilled workers over short and medium-run time horizons.”
The study indicates that the minimum wage can keep low-skilled workers from moving up to a middle class income; such workers experience “significant declines in economic mobility.” Charles Hughes of the Cato Institute explains:
“Many of the people affected by minimum wage increases are on one of the first rungs of the economic ladder, low on marketable skills and experience. Working in these entry level jobs will eventually allow them to move up the economic ladder. By making it harder for these low-skilled workers to get on the first rung of the ladder, minimum wage increases could actually lower their chances of reaching the middle class.”
Adding weight to these findings is a report earlier this year by the non-partisan federal Congressional Budget Office estimating that a three-year phase in of a $10.10 federal minimum wage option would reduce total employment by a stunning 500,000 workers.
Diana Furchtgott-Roth, former chief economist of the U.S. Department of Labor, nicely summed up at MarketWatch the massive problems created for low-skill workers by the minimum wage:
“Minimum-wage laws criminalize low-skill work. Imagine being forbidden to work. That is the case for people with skills under $8.25 an hour. The federal hourly minimum wage is $7.25, and additional costs, such as Social Security, unemployment insurance, and workers compensation bring the cost of employment closer to $8.25. The minimum wage is one reason why the teen unemployment rate is 18%, the youth (20 to 24) unemployment rate is 11%, and the African-American teen unemployment rate is 28%. Those groups have markedly lower skills than average. …
“When the minimum wage is set above someone’s skill level, that person is left on the sidelines. If people cannot get their first job, how can they get their second or third? People who take minimum-wage jobs gain entry to the professional world. Once they are in, they can keep rising.”
A short, highly readable summary of the negative effects of the minimum wage is the 2004 booklet “Minimum Wage, Maximum Damage: How the Minimum Wage Law Destroys Jobs, Perpetuates Poverty, and Erodes Freedom” by Jim Cox, published by the Advocates and available at our online Liberty Store.
They Said It…
SECRETIVE US SPECIAL OP FORCES DEPLOYED WORLDWIDE: “A review of open-source information reveals that in 2012 and 2013, US Special Operations forces (SOF) were likely deployed to — or training, advising or operating with the personnel of — more than 100 foreign countries. And that’s probably an undercount. In 2011, then-SOCOM spokesman Colonel Tim Nye told TomDispatch that Special Operations personnel were annually sent to 120 countries around the world. They were in, that is, about 60 percent of the nations on the planet. … SOCOM is weaving a complex web of alliances with government agencies at home and militaries abroad to ensure that it’s at the center of every conceivable global hot spot and power center. In fact, Special Operations Command has turned the planet into a giant battlefield…” — award-winning journalist Nick Turse, “Why Are US Special Operations Forces Deployed in Over 100 Countries? That’s over 60 percent of the nations on the planet,” The Nation, January 7, 2014.
JUDGE: FOUNDERS WOULD BE “AGHAST” AT NSA: “[N]o court has ever recognized a special need sufficient to justify continuous, daily searches of virtually every American citizen without any particularized suspicion. … I have little doubt that the author of our Constitution, James Madison, who cautioned us to beware ‘the abridgement of freedom of the people by gradual and silent encroachments by those in power,’ would be aghast.” — from U.S. District Court Judge Richard Leon‘s Dec. 16 ruling that the National Security Agency’s bulk collection of phone records was “almost certainly” unconstitutional. The issue seems headed to the Supreme Court.
SNOWDEN JUSTIFIED: “I acted on my
belief that the NSA’s mass surveillance programs would not withstand a constitutional challenge, and that the American public deserved a chance to see these issues determined by open courts. Today, a secret program authorized by a secret court was, when exposed to the light of day, found to violate Americans’ rights. It is the first of many.” — NSA whistleblower Edward Snowden reacting to U.S. District Court Judge Richard Leon’s Dec. 16 ruling (above).
OUR UNCONSTITUTIONAL GOVERNMENT: “Article I, Section 8 of our Constitution lists the activities for which Congress is authorized to tax and spend. Nowhere on that list is there authority for Congress to tax and spend for: Medicare, Social Security, public education, farm subsidies, bank and business bailouts, food stamps and thousands of other activities that account for roughly two-thirds of the federal budget. Neither is there authority for congressional mandates to citizens about what type of health insurance they must purchase, how states and people may use their land, the speed at which they can drive, whether a library has wheelchair ramps, and the gallons of water used per toilet flush. The list of congressional violations of both the letter and spirit of the Constitution is virtually without end. Our derelict Supreme Court has given Congress sanction to do just about anything for which they can muster a majority vote.” — economist and syndicated columnist Walter Williams, “Parting Company,” Jan. 1, 2014.
JAY LENO STONES CONGRESS: “In defending the budget deal, Congressman Paul Ryan quoted the Rolling Stones and said, ‘You can’t always get what you want.’ When it comes to Congress, here’s a better Stones quote: ‘Can’t get no satisfaction.’ How about that?” — Jay Leno Dec. 13, 2013.
Libertarian Party: Why Don’t Politicians Apologize When the Stock Market Goes Up?
The Libertarian Party is asking an unusual and thought-provoking question: Why don’t Democrats and most Republicans apologize to the American people when the stock market goes up?
Think about it. When the stock market drops, politicians invariably exclaim: “Thank goodness we didn’t privatize Social Security! Just look how much people would have lost in the stock market!”
But what about when the market goes… up? Imagine the potential earnings that Americans coerced into Social Security have lost because the government won’t let them control their retirement assets.
“After an almost uninterrupted bull market since March 2009 and six consecutive months of stock market gains, why haven’t politicians who are against any kind of privatization of Social Security apologized to the American people?” asks Libertarian National Committee member William Redpath.
“More than two thirds of workers pay more in payroll taxes than the individual income tax. That is money that is forcibly taken from them by the government that they could invest to build real wealth over the course of their working lives, or money that could be spent to make their lives better today.
“Instead, workers are forced into a system in which their payroll taxes are immediately given to current retirees or spent by the government in other ways.
“People should be free to keep their payroll taxes and use those funds as they see fit. If they choose to save and invest, it doesn’t have to be in the stock market. It could be in more conservative investments. However, the stock market has been the best investment over the long run, and attempts by politicians to demonize it harm the American people.”
In fact, notes Redpath — who is a licensed CPA and a Chartered Financial Analyst (CFA) — during any 20-year period going back to at least 1926, the stock market has never had a negative return. According to Morningstar, $1 invested in a basket of small company stocks at the end of 1925 would have been worth $18,365 at the end of 2012.
Indeed, Social Security is a lousy deal for citizens in many ways, Redpath points out.
“Social Security returns are paltry at best and negative for some people. But the big enchilada that no defender of the status quo will address is this: Americans have no personal property rights in their future Social Security benefits. All Americans are beholden to future Congresses for their benefits. And, benefits can’t be passed onto their children and grandchildren, as private accounts could be,” says Redpath.
Plus, of course, Social Security is headed to insolvency, due to its Ponzi Scheme structure.
“Libertarians call for phasing out the current government-sponsored Social Security system and transitioning to a private voluntary system,” adds Geoffrey J. Neale, current chair of the Libertarian National Committee. “This will remove the looming threat of insolvency while allowing everyone… to be self-sufficient and prosperous in their golden years.”