Should the Sun Set on Social Security?
On Uncommon Knowledge today, Gov. Mitch Daniels advocated for "sunsetting" Social Security. I understand how dire the situation is for the program. I also understand that the promise to those currently and soon to be reliant on it cannot simply be broken. However, I do not understand how wholesale replacement of Social Security can work. As a pay as you go system, those working now will be required to continue paying for those on Social Security as it is today, but if the system is replaced they will also be asked to shoulder the burden of the new system (whatever that may be.) Is it simply time to pay the piper? Are those 45ish and below simply left holding the bag for 70 years of a program that was grand in theory and fatal in practice? Is the only reasonable alternative a gap in coverage? Thoughts like these make smoking enough to not need retirement seem like a good plan.
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Sep '10
Re: Should the Sun Set on Social Security?
No comments after 7 hours! what the...?
It does sound impossible. I think what may help is the idea that doing nothing won't work either. A solution that gets us on a sustainable path (it seems to me) is likely to be better than continuing on a path we know is unsustainable. There will be costs, but the sooner we get off the smaller the mess will be to clean up. At this point, the only play I see is making the mess as small as possible. Avoiding any mess seems impossible.
Dec '10
Re: Should the Sun Set on Social Security?
Even if the chosen solution is to do as Daniels suggests it still leaves the question of how to fund it. SS as we know it can go on it's "trust fund" life support until that too is exhausted, but the government will have to tax directly to redeem the bonds or borrow from the Chinese and tax later to repay that borrowing. Either way, those who are not on SS now or soon will have to pay to close out the current system while paying to stand up the new one. With the economy tepid and demography working against us the outlook is rather bleak for those who will be asked to pony up. The only other alternative I can envision is more along the Ryan model with increased eligibility age and reduced benefits.
Nov '10
Re: Should the Sun Set on Social Security?
I'm 23 years old. I would be gladly pay into social security for the next 30 years if they just said they were shutting down the program and I wouldn't be able to collect benefits when I retire. Just be done with it already! Take my money, pay off our current obligations, and don't ever do anything like this again.
Feb '11
Re: Should the Sun Set on Social Security?
I think we're beyond the "a gap in coverage" stage.
As Glenn Reynolds likes to say/quote, "What can't go on forever, won't."
What I am struggling with is the fact that we aren't the ones who made these promises. In fact, I've been told all through my life that Soc Sec won't be there when I retire. Those who made those promises are dead and gone, and no one was ever encouraged to make Soc Sec their sole source of retirement income.
We either curtail all Soc Sec/Medicare/Medicaid programs at an accelerated rate, or we will have problems that will make these trying times seem like the good old days. Either way, people will have to rely on family again and not their coerced neighbors. Like it or not, "Austerity is coming." (h/t Les Jones)
It's time to start calling all extra-constitutional spending programs what they are: welfare. Retirement welfare, corporate welfare, farmer welfare, healthcare welfare, AFDC welfare, etc. Perhaps then the scales will fall from the eyes of enough citizens to put sanity back in charge in 2012.
Here's hoping.
Mar '11
Re: Should the Sun Set on Social Security?
I wish I had your wisdom and selflessness when I was your age. I agree with everything you said, but it pains me knowing that you have to pay for a previous generation's short-sightedness.
Jul '10
Re: Should the Sun Set on Social Security?
Yes. As quickly as possible and with a means tested alternative for elderly below the poverty line. We'll sell one of Al Gore's jets to pay for that one.
May '10
Re: Should the Sun Set on Social Security?
Social Security cannot be shut down in a way that is fair to all parties. Forget fair. We'll just have to suffer for the foolish decisions of others. If Americans are adults, they'll grit their teeth and bear it. If not, the demographics will choke us.
There's no neat or easy way out of this.
Take it out of the young (like me). We're better able to adjust than people who have been planning on that money and are now too old to be attractive to employers.
But eliminate Social Security; don't just reform it. Government welfare deprives of us money that could be invested and discourages children and grandchildren from taking care of their elders (as they did for thousands of years).
Honestly, though, if Republicans even touch Social Security in the first year of the next Republican President's term, I'll be amazed.
May '10
Re: Should the Sun Set on Social Security?
My biggest problem with Social Insecurity is it breaks down the extended family and the social bonds between generations.
That it is a Ponzi scheme is bad enough, but what is worse is how it has isolated the generations from each other. Before, Grandma used to "have to" move in with the kids. But it wasn't necessarily a bad thing. More hands to help around the house; better use of resources; and the most important thing, family bonds, shared experiences, and the transfer of wisdom to the next generation.
Now, Grandma maintains her "dignity" by not being "dependent" on her former dependents. However, in many cases, she lives a lonely life stuck in a dark, small apartment somewhere, perhaps in a different state than her children. They only occasionally get her company until her very last and most difficult years when she can no longer care for herself any more and she may not be very pleasant to be around.
Her children pay everything for her as they would have before, only through an inefficient bureaucracy that skims money off the top. Worse, their money is de-personalized and detached from them and made just part of the "system."
May '10
Re: Should the Sun Set on Social Security?
That "system" that transfers the money from children to parents is also subject to the whims, manipulations and abuses of the political class, who have warped it into a way to gain votes, control behavior, and increase government power. Any time we channel money through the government, it gets de-personalized, we lose control, and the government gains control.
The fictional Social Insecurity trust fund also will be and already is an excuse for the government to borrow ever more money.
It's harsh to look at it this way, but the harsh reality is that when you subsidize something at the expense of something else, you get more of the former and less of the latter (relatively speaking). In this case, by taking away one incentive for people to have children (to support them in their old age), we got relatively more old people and fewer young people. "Other people's children" will support me in my retirement, so I don't need to have any of my own.
It has become clear around the world: if you want to control a nation's population, and even achieve negative growth, set up a vast safety net for old people.
Jan '11
Re: Should the Sun Set on Social Security?
Stop it now. Medicare and Medicaid as well. Certainly some cut off must be set and those near the transition age will be angry. The sooner it's completed the smaller the angry group and the easier for them to accommodate the change.
May '10
Re: Should the Sun Set on Social Security?
1) Raise retirement age to 67...increase it one year every five till it hits 70.
2) Give those under 30 a chance to put 20% into a fund instead...increase that 10% every 3 years until it hits 100.
3) Those under 30 people will be the first ones NOT to get a gov't check.
4) Remove death benefits and unemployment from it. Those should be current obligations once the BBA is ratified.
I'm sure there is more to tweak, but it's a starting point for discussion.
Mar '11
Re: Should the Sun Set on Social Security?
Gus Marvinson
I wish I had your wisdom and selflessness when I was your age. I agree with everything you said, but it pains me knowing that you have to pay for a previous generation's short-sightedness. · Mar 15 at 7:10pm
I've sometimes wondered if it is possible to renounce one's "benefits". I'd consider it a tax paid to undo the damage of failed central planning, without passing the damage down to unborn generations. I'm -ahem- within sight of those golden years, but have never thought of 'retiring', much less imagined I'd ever collect anything. If enough citizens renounced them, freely, would it make any difference at all? Could self-reliance become a wave?
Sep '10
Re: Should the Sun Set on Social Security?
I have often wondered about the connection between the social safety net and the reduction in children per couple. There was a time when children were an investment in the future for a couple. Additionally, parents had additional reasons to raise their children to be responsible (i.e. they were going to need them).
May '10
Re: Should the Sun Set on Social Security?
Keith Preston: 1) Raise retirement age to 67...increase it one year every five till it hits 70.
2) Give those under 30 a chance to put 20% into a fund instead...increase that 10% every 3 years until it hits 100.
3) Those under 30 people will be the first ones NOT to get a gov't check.
4) Remove death benefits and unemployment from it. Those should be current obligations once the BBA is ratified.
I'm sure there is more to tweak, but it's a starting point for discussion.
I like this. An orderly transition, as opposed to an abrupt cessation. Which is what we will get if we continue on our current path.
If you are hurtling toward a wall at 90 mph, you better start decelerating well before you get to it. If you wait too long, you'll still hit the wall. If you stop too quickly, though, the car may remain intact but the passengers could still get hurt.
Unfortunately our politics are crisis-driven, and we lack long-term thinking and planning. We're fast approaching the wall of government default, and we can't stop.
Edited on Mar 15, 2011 at 8:17pmMay '10
Re: Should the Sun Set on Social Security?
Ross Conatser
I have often wondered about the connection between the social safety net and the reduction in children per couple. There was a time when children were an investment in the future for a couple. Additionally, parents had additional reasons to raise their children to be responsible (i.e. they were going to need them).
That is one very big reason families in Asia are so tightly-knit, and values passed down so well over generations.
However, even their culture is not immune. Japan is a case in point. In the 1980s, they were going to take over the world and appeared to be doing everything right. Then their demographics overtook them.
Their negative population growth is the result of many factors, including an already dense population and a high cost of living. However, the rich public benefits to the elderly surely looms large among those factors.
I'm not advocating positive population growth forever (the math quickly overwhelms you), but negative population growth is clearly a huge problem for any society.
Jul '10
Re: Should the Sun Set on Social Security?
It's illegal to run a Ponzi scheme...unless you're the federal government. This flatly unconstitutional program needs to end immediately, but good luck getting a majority in this nation nursing on the government teat to support doing so.
Oct '10
Re: Should the Sun Set on Social Security?
If you haven't seen it, Paul Ryan's "Roadmap" is a workable plan.
Dec '10
Re: Should the Sun Set on Social Security?
All good points in a perfect world. However, what do we do in reality with a culture of dependency and a voting population that demands to be paid for its participation?
Edited on Mar 15, 2011 at 9:00pmSep '10
Re: Should the Sun Set on Social Security?
If the left refuses to acknowledge the problem, and continues to campaign on a perpetual free lunch, how do we advance our side of the argument? Most voters aren't savvy enough to fully understand the magnitude of the numbers, and where those numbers will lead.
Sadly, I just don't see any serious reforms (I am personally in the "end it all asap" camp) taking place until after we hit the wall. Cutting spending sounds good in general, but most people don't view SS and Medicare as government spending, they view it as "the way things are."
And no one has mentioned Obamacare yet..
Aug '10
Re: Should the Sun Set on Social Security?
On my droid, so a short comment now. The private sector counterpart is an unvested retirement plan with a shrinking pool of active, paying workers. It's been presented aspartially vested (funded) but it's not; instead it's a Ponzi. To properly fund this mess would require the burdened generation to fund their retirement and that of my generation. There are too many of us and too few of them. In the private sector, say a partnership, the older partners would be looking to sell, and the younger partners would be leaving to join another firm. In the case of fraud -- a Ponzi (remember the assurances of a lockbox?) -- there would be 360 degree litigation, Jarndyce v Jarndyce. Need to think it through. Maybe kill FICA now, make the payments for a limited number of years and turn it back to the states to see if anyone can come up with something that works. Please overlook any typos.