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Friday, August 19, 2005

Lancelot On Social Security

I really liked Lancelot Finn's article on Social Security reform for Tech Central Station. It covers some of the current proposals and the problems of our current system. I do believe that we will have to index benefits to reduce payouts to wealthier people in the end. As Lancelot (Nathan Smith) writes:
Meanwhile, today's Social Security welfare queens should know this and be warned: Social Security reform will happen, sooner or later. And what's on the table now is the best deal they're likely to get. Bush has promised there will be no changes for those over 55, which is more than generous. Their benefits are not guaranteed by law. Nor are their benefits objectively deserved, based on what they contributed. Still less do they represent a "compact between the generations" in any sense. They are merely the ill-gotten gains from electoral class warfare against younger generations. Only the voting clout of the elderly protects current benefit levels. But every year, the generations for whom the New Deal is the Old Ripoff increase their share of the vote.
It's hard to move away from such a stupid and yet such a necessary system. Still, we are going to have to change things soon (within the next ten years), and the current proposals seem to be an effort at increasing the fairness of the system. As it stands the Social Security system is designed to fail. That failure will be a brutal blow to the lower income population that hasn't been able to save for itself because of high payroll taxes and will find itself getting negative return on those taxes.

And we can't fix Social Security without beginning to save the money paid in. All the rhetoric of reform opponents is designed only to avoid that reality.

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