We can no more afford to continue to invest in Social Security than we can
afford to invest with Bernie Madoff. The very structure of Social Security's pay as you go' system
defines its historic, present, and ultimate insolvency. The notion that benefits to older Americans can be sustained by confiscating, without investment, funds from younger workers is as flawed as Marxism itself. The proof of the mendacity of this thinking is also the most daunting challenge to ending its domination of the lives of wage laborers. That is, after more than sixty years of this financial experiment, if America decided to end Social Security today, wage earners would have to generate
22 trillion dollars of benefits for those who are retired or who are near retirement.
There is, however, an opportunity to generate this amount of funding though of the engines of wealth provided by faithful, honest investment in a free market system. For instance, as is explored in "
Financial Stimulus, Bank Bail Outs, and Ending Social Security," instead of having only $250, 000 dollars generated by payroll taxes over forty years of Social Security taxation, real investment at a modest rate of return would yield nearly $700,000. Using the power of compounding interest, this generation can pay off the twenty-two trillion without losing its expected personal retirement income, and, at the same time, provide that the next generation, our children and their children, can live as a free, wealthy and prosperous people. We can end Social Security, and, as good parents and citizens, we should not rest until we have put a stake through the heart of this monster with a constitutional amendment.
Actuarially, the difference between the median household contributions and those same contributions compounded at an annual rate, demonstrate that technically we can end Social Security in a generation, pay off all the benefits as promised, and perhaps even have a little extra left over. The biggest challenge to ending Social Security is finding the political will to end the program. The moves to "reform," "save," or eventually "replace" Social Security have gained no traction. Indeed, the failure of any momentum for reform can be seen as the Gettysburg of the Gingrich congressional revolution. Sadly though, it is the purveyors of financial enslavement who have, seemingly, emerged victorious, not the armies of liberty. The failure was, in part, because the movement was co-opted by legislators who had more of an interest in commissions for Wall Street than the liberation of their constituents. The failure was, however, primarily the result of the general cowardice of a political class living in the shadow of polls, polls driven by a liberal intelligentsia that constantly calls us back to Egypt, to Europe, and to slavery.
The moral compass that landed rights give a free people vanish when wage earners have no hope of financial freedom. Our children will grow up with the psychology of victims dependent on the federal government because they ARE victims. For the median family, after forty years of paying 12% to 15% of its income to the federal government,
to be offered benefits only slightly above the poverty level does, in fact, make the core producers and voters in America victims that have been reduced to dependency on the federal government. Can such a voting block have the interests of self-government at heart? No, because they are victims, core constituency groups who will never see the tangible benefits and rewards of property, can be easily deceived into seeing only the immediate benefits of not paying income taxes. Even more tragically, these same producers rejoice at receiving tax breaks for paying outrageous sums each year in interest to a banking system that manages their debt so precisely that the "
Company Store" itself must blush.
It should not be surprising, then, that with the benefits of liberty thus cloaked, no Social Security reformation plan has been dramatic enough to clear the murky, hellish citadels of the bankrupt intelligentsia. If those who understand the depravity of the current "retirement system" will be bold and begin with no compromises, Americans will understand how much is at stake. On the other hand, if those who would be free are willing to compromise with economic systems that share more in common with feudalism than with liberty, then their failure is deserved.
More specifically, the problem with the Social Security plans presented under President Bush from 2003 to 2008 is that, first of all, none of them go far enough. These plans, for the most part, have sought to "save" Social Security. Such compromise plans will not generate enough income to pay off the already incurred debt, and their failures to do so will only make our children more hopeless and more resigned to having upwards of 15% of their income confiscated by the United States government before that government has provided even one constitutionally required service. Nonetheless, many of the plans were carefully thought out and crafted. Studying the things the plans did well helps document the serious challenges that Social Security reform presents.
There were
29 plans for Social Security reform evaluated by the Office of Social Security's Chief Actuary offered from 2003 to 2008. The Representative E. Clay Shaw, Jr's
Social Security Guarantee Plus Plan, offered by in 2003, was one of the first plans. It would eventually result in Social Security benefits being paid from individual investment accounts. The planned transition would have been very complex, and its ultimate result seems to have been benefits based on a 3.5% investment of the 12.4% confiscated by the Social Security payroll tax. It is very difficult to ascertain whether or not a 3.5% investment would be nearly enough to offer a benefit of significant value to a retiree. The end result might well be a marginal increase in the overall solvency of Social Security, but such a middling approach, like many others, cannot succeed because it is not complete. The notion that we must save Social Security must be dispensed with. We must completely and utterly end Social Security, and, once this generation has paid the costs for the next generation to escape the clutches of this blood sucking communist propaganda program, we must eliminate any future program of any similar type by laws as immutable as men can frame. Of significance is paragraph three of E.
Shaw's letter to congress expressing his faith in his Guarantee Plus Plan for Social Security reformation. "Under my plan," writes E. Clay Shaw of Florida's ninth district, " Nobody would receive less than what is promised under current law, including COLAs. Nobody is exposed to individual investment risk" The promise that no retiree will be exposed to individual retirement risk is an absolutely essential part any Social Security reform plan. Such a guarantee goes to the very heart of the original purposes of Social Security. In the Great Depression American landscape of bank failures and stock market collapses, such a government guarantee was particularly inviting. Make no mistake about it, the recent threats of a Wall Street Collapse of similar proportions is a significant challenge to overcome in seeking to end today's Social Security. The suddenness, the complexity, and the vast sums involved in financial stimulus packages and in the TARP funds will, even if no further calamities ensue, serve as a reminder for all Americans how precarious our savings in this world can be. Nonetheless, this monster that drinks our blood was forged in an atmosphere of financial disaster and it may be that only in the crucible of apparently similar crises might Social Security's dark, enslaving powers be dissipated.
A challenge that did
not exist in the times of FDR and the origin of Social Security now exists for all who would end the American retirement system. Since the Great Depression Keynesian big government deficit spending has accelerated inflation at a rate that rivals the standard of living increases accrued through the free enterprise, free market system. Even after winning two world wars and developing technology able to put a man on the moon, and, more recently, moving an army of women and mothers from the home to the workplace, the pace of inflated incomes has at times given serious chase to the increased power of production in the American workforce. Should the miraculous power of the engine of United States economic development only hold steady, the pace of our deficits may result in inflationary patterns that completely overwhelm our marketplaces. Without actually knowing the facts and figures, many Americans understand this implicitly. Mr. Shaw's plan plainly and straightforwardly addresses this concern, and so must any plan that seeks to privatize social security. However, Mr. Shaw's plan is too conservative. On the one hand the meager investment accounts themselves might barely keep up with inflation and the government guarantees themselves, spooky little certificates or not, might not be adequate to the challenges of future, unforeseeable COLA's.
There are, then, three direct challenges to serious Social Security reform: the twenty-two trillion dollars we now owe to those at or near retirement age, interpreting for the American public the twenty-two trillion in terms of inflation over twenty years, and an atmosphere of distrust for large financial institutions of investment that is at least equal to, or greater than that faced in FDR's age. There is, however, one advantage that those of us who would put a stake through the heart of Social Security have that our forebears, even as recently as Regan, did not have. Today, no one trusts the federal government to keep their word. Only bankers and brokers are more mistrusted than our duly elected representatives. This distrust can be turned into a positive American force for the future if we can show younger Americans how to convert the 12.4% of their income confiscated under the present system into something of real and tangible value, like gold, that does not entirely lose value in recessions and escalates in value with inflation. If we can show Americans how, within the span of a decade, to convert 12.4% of their paychecks into a tangible capital asset that will begin to yield benefits equal to a lifetime of earned Social Security, they will begin to listen. This is possible.