Thursday, February 03, 2005

A strange state

I hope you understood the president’s State of the Union speech about changes in Social Security. I know I didn’t.

I hope he’s not thinking that it would be OK for some of us to be standing in a traffic median when we get old with a scribbled sign hoping for a handout.

I think he said he wants to give income-earners more control over their retirement plans and I figure he wants also to cut government-provided benefits.

It is an argument that makes about as much sense to me as a law that says you don’t have to wear a helmet when you ride a motorcycle.

The argument in both cases goes like this: It’s all a matter of individual choice, control over your own destiny and freedom.

That argument on either topic has a huge appeal to motorcycle riders, libertarians, anarchists and so-called conservatives, but I think it is a faulted argument. It supposes that people always behave intelligently and invariably act in their own best interest.

If a guy falls off his bike and breaks his head, it affects the rest of us in the society. First come the long delays on the highways while the medics haul off the injured and the corpses following a biker’s accident. We are not just inconvenienced, we also are paying for the medics, the police, the fire department, the ambulances and the treatment.

A guy who breaks his head and spends decades in a coma at hospital before he finally dies can cost us millions.

Theoretically, if he had worn a helmet, the rest of us would not have to pay for his hospital treatment and rehabilitation

That’s the way, I feel about Social Security. If a guy chooses to invest in the stock market – gamble, really – with money that would have gone to a Social Security account and ends up bankrupt, what happens? We could say "Sorry, you made a mistake, so you can starve to death."
But we won’t. That’s not the way we do things. That’s not the way any civilized society does things.

So since he is in a bad way, we help him. That is to say, we underwrite his unnecessary risk-taking.

Earlier, we offered him an insurance plan. He chose an investment plan instead. We should not have to underwrite his confusion or his greed.

But we don’t have to make that choice.

I did understand this much in the president’s speech: The government will be "permitting all workers to set aside four percentage points of their payroll taxes in their (private) accounts."

The deduction now for Social Security is a little over six percent. The plan as stated last week would mean that two-thirds of a payroll deduction could go into Wall Street stocks and/or bonds. That’s the way I understand it.

There are many aspects of life in which the society as a whole says, "We see an area here where the imprudent, greedy and stupid among us could bring harm to themselves and to the entire group, therefore, certain safeguards are mandatory."

I don’t have a plan, but I do have a different take on this issue. The way I figure it, once insurance protections are in place and after a person meets his basic obligations to the Social Security Administration, he should be free to invest some or all his remaining money in the stock market or in gold futures, pork bellies, Caribbean real estate, trips to Mars or Seabiscuit’s prospects at the track.

But without the Social Security safety net, I can imagine our would-be ill-advised big-capitalist wannabe standing in the traffic median at a stoplight holding a sign that reads: "Please help. No Social Security. Thought I was playing it smart, but I was a fool. God bless."

I’d give him a buck, wouldn’t you?


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