One of the legs of the three-legged stool of entitlements the public counts on is Social Security. When it comes budget time, Democrats like to threaten voters with the possibility that Republicans will take it away from them. A retired friend of mine was worried during the shutdown that she wouldn’t receive her Social Security check. It is one program that is a political sacred cow. The problem is that it has nearly been bled to death by the same people who claim they want to protect it: Democrats.
When FDR began the system, he wanted to privatize a portion of it. But he was advised to let the government handle it. They might have seen it as a program that would never be in financial trouble and could keep Democrats in control of the government forever because if anyone threatened its existence, they would never be elected. What Democrats weren’t counting on was the expansion of the program to include more people, increasing life expectancy, and its use as a fund to erase budget deficits. In 1968, Congress decided to give President Johnson a surplus for his last year in office and included Social Security funds into the federal budget. Since then, Social Security has leaked worst than a submarine with a screen door. Social Security tax revenues have grown a bit. But with more people starting to draw from the fund every day and millions fewer people paying into the system for the last decade, the system is predicted to go broke before the next generation is able to draw from it. I expect to draw less from it than my parents will.
If Social Security had not been able to pay out to beneficiaries during the last shutdown, Republicans could have jumped all over the system and Democrats because it would have proven that there is no separation of Social Security from the general budget as Democrats claim. In hearings, the public would find out that if Social Security had been partially privatized (something that Congressmen do with their retirement funds that they won’t allow others to do), our private economy would have had trillions of dollars more that would have been invested to make the economy stronger. The stock market might have exceeded 30,000 points, and retirees might be receiving more each week than they do each month. Even with Clinton beginning to take 10% of Social Security funds in 1993, the system will go bankrupt if things go on as they have been during the last few decades.
Democrats often believe that if you are doing something wrong, you shouldn’t try to correct the situation to make things right for fear you’ll make things better and cause people to wonder why you didn’t correct your mistake sooner. Economists know it is a pyramid scheme that relies on more people paying into the system to support those who depend on the money. But over the past 40 years, nearly a generation of future workers that would have paid into the system were exterminated in the womb; and the last couple of generations have outlived age 65 by over a decade, which has depleted much of the funds. That leg of the stool is nearly hollow from rot, and those who want to replace it are attacked. But someday, the leg will collapse, and the stool will fail. It will be too late to tell the public that something should have been done because the bleak future will have arrived. The ones who did the right thing and privately invested in their future, like Congress, will come out alright. But the people who believed them and counted on Social Security to always exist will be left out in the cold to fend for themselves.
It is foolish to trust someone who gives you advice they won’t follow themselves. Trusting in the solvency of Social Security is foolish.
Photo credit: terrellaftermath