I was griping the other day about entitlements. For example, Social Security.
Kelli, ever my lovely devil's advocate, pointed out that people have been pumping money into good ol' Soc-Sec for years, and it wouldn't be fair just to do away with it and leave them in the lurch, and asked "how would you even go about getting rid of it?"
Well, let me tell you.
First, let's get out of our heads entirely the notion that Social Security is a "right." You don't have a right to have the government guarantee your retirement, especially given the way Soc-Sec actually works.
See, you contribute to the program throughout your working life in the form of an inescapable, unavoidable, mandatory, no-opt-out tax.
Then, when you get old enough, the government gives you way more money back than you ever put in, unless you are staggeringly wealthy.
How does it perform this miracle?
Easy. It's a Ponzi scheme. The people putting in money now, are paying not for their own retirements, but those of the people currently drawing funds from Soc-Sec. When they retire, they will be paid for by the succeeding generation of workers.
In theory.
Of course, since there are now more people retired than working, that's getting to be an ever bigger drain on the treasury.
Funny, the way the government is fine to do this, but regular citizens get chucked in jail for trying it, isn't it?
To put things in perspective, Soc-Sec is as big a proportion of the federal budget as defense - all of it - is. As big a portion as Medicare and Medicaid combined. (We'll get to those in another article, real soon.)
To put it further in perspective, Social Security costs us over 700 billion dollars a year.
That's a lot.
That's so much "a lot," that a single year of Social Security, plus a single year of Medicaid, pays for the entire Global War On Terror combined so far.
So when people whine about how much the GWOT has cost us, I sag, and sigh, and go "here we go again..."
See, Social Security was supposed to be temporary. Back when it was enacted, in response to the Great Depression One, it was touted as a means of providing people who had been hard-hit by the Depression with a safety net to get them through until the crisis was over.
Of course, like all other "for the duration of the crisis" laws, somehow they never got around to repealing it, and it became a permanent fixture in our political landscape.
But there's still no Constitutional authority for it, and there's no "right" involved; you, as an individual, have no right to a penny of any money earned by someone else, and pennies earned by other people provide far and away the greatest portion of any money you'll ever receive from Soc-Sec.
So it should go away.
Especially since our newly elected crop of idiots (who replace other idiots, who were elected to get the newly elected crop of idiots out of the offices they held before the 2008 elections, to which they had been elected to get rid of the previous set of idiots, who all got re-elected in 2008 - the circle of life) has decided to take all entitlement spending, namely Social Security, Medicare, and Medicaid, off the table for budget cuts.
Great idea; same one we've had before. Cut taxes, yay! Spend just as much money as before, boo!
Fucking morons.
Not them, us. For electing these idiots again, to replace those idiots we had just elected. Again.
At any rate, if Social Security were entirely eliminated, that would be, well, $700 billion removed from the federal budget.
Of course, it would also be removed from revenues as well.
That would be a catastrophe; just look at the rhetoric surrounding the Bush tax cuts and their potential renewal. "Would cost $1 trillion dollars!"
"Cost" ?!
You keep using that word.
I do not think it means what you think it means.
See, "cost" is when you have to spend money for something.
When a tax cut happens, it didn't "cost" anything. The government just didn't take as much money it has no right to, as it did before.
That's your money. Not theirs. The government - contrary to what Mr. Obama appears to believe - doesn't have a right to any of it. Period. So you not paying them can't "cost" anything.
All it means is that they have less of your money to spend. That's not a cost.
What it IS, however, is economic stimulus - you can spend that money somewhere else, thus stimulating economic activity.
Admittedly, it does mean the government has less of your money to spend, which means that they have to cut spending.
Balancing a checkbook isn't THAT hard, you guys; we all have to do it every day.
Well, some of us it's more like every month, but still.
There's no good reason the government should be free to ignore economic realities its citizens have to cope with on a daily basis, namely that you cannot spend money you don't have, plain and simple.
So.
Let's get to the meat of the issue; how do you eliminate a program that every taxpayer contributes to, thus allowing them to instead keep their own money and stimulate the holy hell out of the economy at the same time?
In a nutshell, stop making them pay in.
There's no realistic way to eliminate the program without some uncomfortable belt-tightening in Washington.
So, what we do is this:
Graduatedly reduce contributions to the program by the age of the contributors.
Say, next year, new workers holding their first jobs will no longer have to contribute anything.
The longer the worker has been contributing to the program, the bigger their estimated payouts are, but never to exceed the amount they directly contributed to the program.
Now, instead of cutting off the folks already riding the program, cut salaries for all members of Congress in half, and let their salaries make up the remainder of the payments for the people currently taking payments from Soc-Sec, until all of those people, well, die.
At which time Congressional salaries remain halved for good.
At retirement age, all workers now contributing to the program receive either an annuity, or a lump sum payment, at their option, in - note this - UNTAXABLE funds, equal to the total dollar value of their lifetime contributions.
Once all workers currently contributing have retired, the program ceases to exist, other than to administer the payouts of any annuities opted for; once those annuities end, the program is just gone.
Meantime, the workers who began working after the cutoff date have kept more of their salaries all of their working lives, and neither contributed a dime to, nor have any ability to expect a dime from, the Social Security program.
Now, people are stupid. I know potting soil smarter than most of the people I am actually personally acquainted with; it grows plants, and stuff.
So people wouldn't plan for their retirements.
And I'm not totally deaf to the notion that some kind of retirement package could be put together.
As such, I have an idea.
Gather round, listen closely. I expect you to tell me if this is bullshit or not after.
First, while the government could easily oversee management of the funds themselves, they should have neither control of, nor access to, those funds.
Second, most people who are currently working HAVE some kind of retirement package already, but there are problems.
What I propose is to eliminate some of those problems.
See, back in the day when people typically worked for one company all their working life and retired on an in-house pension from that company, the 401(k) plan was a great idea.
But nowadays, people change jobs much more frequently, and often the retirement plans of previous employers simply become lost, remaining forever with the banks that employer chose to administer those plans.
So.
Instead of the current system, I propose this.
Convert the ubiquitous Social Security number into an account number.
That account is a 401(k), with two significant changes.
First, that because all funds in it are contributed from after-tax income, payments from it are considered after-tax income automatically whenever they are disbursed.
Second, that when you change employers, your new employer simply uses your Soc-Sec number to disburse any matching funds they contribute towards your retirement into that account; but they have no control over, or access to, those funds either.
What this creates is a private, portable retirement for everyone. When you change jobs, you don't have to fill out reams of paperwork or worry if your funds are vested; employer contributions become a part of your account when they're added, and belong to you from that day forward, even if you change jobs.
Kinda like having Gmail; you don't actually care what internet provider you're using, because your email stays with you, thus preventing you from losing all your old correspondence from your ISP-given email address when you change ISPs unless you perform a series of acrobatic monkey tricks to keep it.
You could even call it...
...Social Security.
But when you retire, the funds you'd be receiving would be a combination of your own wages, as chosen by you, and the contributions of your employer - in other words, one hundred percent your own money, without stealing from anyone.
Plus, without the huge drain of the Social Security tax on your paycheck, you'd first have more money to contribute to your retirement, and second, have more to spend.
I submit to you that while the banks would scream, this would stimulate the economy a treat.
(More on ways to fix the economy right up in a follow-on article. Tuesday night, I promise, right hand up to God.)
