SS reform and SS privatization

This meaty issue was supposedly on Bush's to-do list pre-9/11 but he never got around to pushing for it. Now that he has his "mandate," he's going to push for it.

When he talked about this in 2000, on its face it sounded like a good idea for young workers like myself who pay into the system but seriously doubt we will ever get any money in return. Of course his rate or return arguments aren't so simple: the rate of returns might go up when these funds are in the stock market, but assuredly the rest of the markets returns will go down (excess supply for the same demand), and worse case scenario is that when you need your SS money, the stock market tanks.

More importantly, that wasn't the point of social security. The idea was a social compact between workers of yesterday and today. You work hard now, and you pay into a fund that will pay for those who worked before you and fought wars to protect you/your country in the past. It is a way of paying homage to the elderly and ensuring that society won't let them fall through the cracks with they didn't pick their stock wisely or save for their retirement. You could make the valid responsibility argument that these folks should pay for their irresponsibility and society shouldn't have to pony up for them living the high life while their colleagues socked it away.

But right now, it isn't a fund for the "stupid" but for all workers regardless of income levels. That way, it doesn't feel so socialistic and more "fair." Personally, I don't know if the Bill Gates of the world should really be able to collect social security benefits when they retire, but Democrats lost this battle in the 1980s. Does this battle need to be fought again?

Bush points to the crisis that Social Security will be insolvent in a few decades and proposes we spend a trillion or so in transition costs to move my social security taxes over to the stock market. But the record points out that many times SS was on the brink of disaster and they made it solvent again with minimal changes.

And let's be honest with ourselves: eventually, we have to raise the retirement age (for the Baby Boomer Generation, not The Greatest Generation) and we might have to create income eligibility. Too many people are living longer than the program was designed to handle and many are living well enough to not need government handouts. And if the stock market is more attractive than social security we will still have the incentive to invest rather than depend on the government.

It is true that soon my parent's generation will retire and there will be less workers per retiree than ever before. But keep in mind we used to have a social security surplus, which Bush is currently spending on tax cuts for the rich and Star Wars II (among other things).

I like the compromise idea of giving the surplus and national debt over to the stock market (actually our debt is already in the bond market, never mind) and if it does well, great if not, we haven't lost anything for a couple decades. It creates a quasi -lock box (a la Al Gore, bless his pudgy soul) that free market GOPers and Poverty Advocate Democrats can both get behind. Bush can say he "reformed social security" without creating a give-away for the financial industry like he did for pharmaceuticals with the terrible Rx drug program they passed this spring.

Sure I wish I could opt out of paying those payroll taxes for selfish reasons, but I think it is in the interest of the general welfare of the US to continue this key part of the New Deal.