Pissin' on the Third Rail

February 11, 2005

For those of us that dream of living in a free country some day, Social Security sucks. Why haven't I heard anyone ask this basic question: If Social Security is such a wonderful thing to have, why is it mandatory? In his State of the Union address, President Bush referred to it as "a great moral success of the 20th Century". Who's morals is he referring to? Marx or Engels? Anyway, I'm going to give the President the benefit of the doubt. I think he knows that Social Security should be scrapped, but he also knows suggesting such a thing would get him nowhere, so instead, he's taking a baby-step in that direction and suggesting that younger workers be allowed to invest some of their money privately. I have to give him a big thumbs up for having the balls to grab on to "the Third Rail of American Politics", even if I'd prefer he go further by pissing all over it in a show of disrespect. I didn't realize how dangerous it was to raise the subject until he started doing nothing more than explaining why the system can't last forever. The Democrats may disagree on exact dates, but they know he's right, and yet, when he started talking about it, they flipped out. You could almost feel them writhing in their seats and thinking "What is he doing? We can't let the Average American know about this! They might want out!"

One thing that kills me in the recent conversations is the liberal claims about what it will cost to allow younger people to redirect some of their payroll taxes toward private investments. I heard several Democrats claim that it would cost 2 trillion dollars and kept wondering why. What is that 2 trillion dollars to be used for? Then I remembered that when politicians say "cost", they don't mean cost at all. They mean that 2 trillion dollars that they plan to collect in taxes will remain in the hands of the people that own it instead. It's the same twisted view and lack of respect for their constituents' property rights that caused them to say "we can't afford tax cuts". I can't ridicule this state of mind any better than Ann Coulter already has, so…

First, consider the psychosis revealed in the concept of "paying for" tax cuts. Tax cuts aren't something you pay for. It's less money for the government to spend. Hearing politicians tell us "we" can't "afford" a tax cut is like listening to a glutton tell you he can't "afford" a diet. In no other context do people talk about "paying for" money they don't have. I can't pay for your refusal to give me money because I need a yacht.

Democrats at the time were also claiming that Bush's tax cut would harm Social Security. Funny, I don't remember any cuts in the "payroll taxes" that comprise our Social Security contributions. Why would they connect the two things? Well, that brings me to the next point.

I get what the Democrats are trying to say with their misguided talk of costs. Benefits need to be paid out via Social Security and that will continue to cost a great deal of money. If we reduce the amount of money coming in, those costs will be harder to pay. But isn't the money coming in now supposed to go to the present contributors when they reach a point where they need it? What about all of the money the current recipients gave the government over the years in payroll taxes? Shouldn't the system just take that money and give it back to the people that contributed it? If we stopped the whole thing today and income to Social Security ceased, all the government would have to do is give back the money they've been collecting, right? [sigh] I don't think there's anything more infuriating than making a point to an opponent for years, while they continue to argue, then suddenly having your opponent explain the exact same point to you as though you are a dumb-ass for not knowing it. This is exactly what's happened in the Social Security debate. Conservatives have called the system a Ponzi scheme for years. Now that we've suggested putting less money into the system, liberals are all too eager to point out that the money we put in isn't held for our retirement, but spent immediately with the intention of paying it back at some later date. No shit? Really? So, they argue now that we have to keep putting in as much money as possible because the government spent what we gave them so far and will need more if they're ever going to pay us back. Let me get this straight… You took 13% of my income and claimed it was to help me later in life, but then you immediately spent it on something else, and now you want me to give you more, and all you can give me in return is the same promise you just broke five seconds ago? Gee, that sounds great! Where do I sign up? Sorry congress, but you dug this hole, and now you should have to dig your way out with some serious spending cuts in other areas. And no whining!

On somewhat of a side note, this debate has caused liberals to reverse their position on another point (although much more subtly in this case because soon enough, they will desperately need to revert to business as usual). One suggestion for reforming Social Security has been to tie benefit increases to prices, rather than wages (the way it was when the system began). The Democrats oppose this plan. Forget whether or not you agree with them, just listen to their reasoning. The Democrats know that growth in wages consistently outpaces price inflation. While tying Social Security payments to price index wouldn't mean any reduction in benefits, it would lead to a slower increase. Got that? The core of their argument is the fact that wages increase faster than prices. Do you remember any of the stump speeches Kerry and Edwards made last year? Or just the rhetoric of socialists in general for the last frickin' century? Not only do they go out of their way to bring up wages and inflation, but they claim that families aren't getting enough income to keep up with prices — a story that is exactly opposite from what they apparently know to be true. This would be hilarious if it wasn't costing me so much. At least we can finally answer a long-standing question: Are liberals really that dumb, or are they just lying to get their way? Lies it is!

Another liberal talking point in opposition to partial private investment is that it replaces a "guaranteed benefit" with something equivalent to gambling. Ugh! Where do I start with this one? First of all, we know that Social Security, as it's currently structured, is headed for disaster. This is their idea of a guaranteed benefit? It would be more accurate to say that the only guarantee we currently have is not to get a benefit. What few people know is that even if the Social Security fund had enough money in it to last forever, there would be no "guaranteed benefit". In all of the legislation that constitutes what we refer to as Social Security, there is nothing that requires the government to give you a single penny. They have no legal obligation to pay you or anyone else back. Ever. So much for guaranteed — now what about the benefit? I've heard many estimates for the rate of return on money put into Social Security. They all fall between 1% and 3%. Honestly, 3% is just something I overheard on the radio. I wasn't able to find and verify any estimate higher than 2.37%, but let's be generous and assume a 3% rate of return. Let's also assume you'll be working and investing for 40 years. Liberals claim the stock market is "risky" or call it "gambling". That's true if you are actively investing over very short time periods in an attempt to get rich as quickly as possible or make your entire living on nothing but investing. However, we're not talking about lots of activity over a short time period here. We're talking about the length of a person's career. If you look at the S&P 500 over any 40 year period, the rate of return kills Social Security. The worst period was from 1928-1968 which would have given you an 8.9% rate of return. In other words, the stock market at its worst yields three times what Social Security yields at its best. Now, I sometimes hear people say "but if people had to rely entirely on private investment, some wouldn't save anything". Oh, absolutely. They're called irresponsible douche-bags and they're always going to be with us. So, if they have to live with their decisions, they're going to suffer. I get that. But if you steal money from someone else, then that person suffers. Suffering is unavoidable for one or the other. What I don't get is how you can look at the person who never saved anything, then look at some stranger, and decide that it's the stranger that should bear the suffering. Who the hell are you to even make such a decision? And what led you to decide so irrationally? One last contrast I have to point out concerns who "owns" your investment. If you die the day you retire, what happens to all the money you've invested all your life? If it's invested privately, you can give it to a loved one, charity, school, or other cause of your choice. If it's all been dumped into Social Security, the government just keeps it. Which do you prefer?

I can't let Bush completely off the hook here. He said something in the third Presidential debate last year and expanded on it in the State of the Union address. Each time, it pissed me off more than anything the Democrats have yet said. In the debate, he said:

I believe that younger workers ought to be allowed to take some of their own money and put it in a personal savings account, because I understand that they need to get better rates of return than the rates of return being given in the current Social Security trust.

What am I supposed to say to that? "Oh! Thank you, master. You are so very kind for allowing me to save my own money." And then again last week, something similar from the President:

Here's why the personal accounts are a better deal. Your money will grow, over time, at a greater rate than anything the current system can deliver -- and your account will provide money for retirement over and above the check you will receive from Social Security. In addition, you'll be able to pass along the money that accumulates in your personal account, if you wish, to your children and -- or grandchildren. And best of all, the money in the account is yours, and the government can never take it away.

Upon hearing that, I instantly thought of Chris Rock saying "Whatchu want, a cookie!?" That's how it's supposed to be! It's not that I disagree with Bush's sentiments at all, but by mentioning it the way he does, it brings into sharp contrast what is and what should be, and he acts as if correcting the situation is a gift that the government will bestow upon us. I mean, if he went on TV and said "We will pass legislation to make killing watch repairmen illegal", would your reaction be "Oh, goody"? Or would you say "What!? Why the fuck was that ever legal to begin with?" Seriously, have we set the bar that low?

Finally, I need to address a statement that was made to me personally by a liberal friend. I can't quote him exactly, but he basically said that sometimes we have to give up some of our rights to fulfill an obligation to society. Providing a "safety net" for citizens is apparently one of these obligations. If you feel this way, then I guess the rest of my arguments are, unfortunately, moot. Explaining why this view is incorrect would be an entire article of its own, so I won't get too detailed, but I'm compelled to attempt a short explanation of why this is bullshit. Liberals have assigned obligations to individuals, but what about the rights of those individuals? And if the obligations come into conflict with the rights, which wins out? This is an easy call. In fact, the conflict is manufactured. The obligations of an individual to society are the invention of men and, as a result, are arbitrary and subject to change with the opinions of men. There is no consistent framework or set of criteria for determining these obligations. Rights, on the other hand, are an intrinsic part of an individual and can be defined with a set of objective, permanent criteria. This is why I describe it as a manufactured conflict. That which is intrinsic and permanent can't be measured against the imaginary.

In the end, I think this whole debate over Social Security simply proves that Sallust was right. "Few men desire liberty: The majority are satisfied with a just master." I find that very depressing.

Update: Here's your proof. That makes me sick.

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