One of the desperation tactics of the Democrats this year it to claim that "Republicans want to privatize Social Security” and that that would be a terrible thing.
And indeed millions of conservatives would love to see SS privatized. And with the recent news that SS is now officially broke - it is paying out more than it is taking in - privatization looks better and better. It always has.
And why not? In virtually every single case where government services have been privatized – from garbage collection to the state-owned freight railroads in Canada – it has resulted in much lower costs, and vastly better service.
Privatization would be the best thing for SS, which is a collapsing house of cards, like all socialist plans like Medicaid, Medicare and the rest. They are all broke because they are hugely inefficient and are run by Democrats not to serve the people, but for political gain. Social Security in 2010 will pay out more than it takes in for the first time ever. And demographics are pushing the system toward increasing insolvency, with more and more people retiring and fewer and fewer employed people paying in.
The first person in America to collect an SS check in 1940 was Ida Mae Fuller of Ludlow, Vermont who paid in $24 to the fund, lived to be 100 years old, and collected $23,000 in benefits, or almost 1,000 times as much as she paid in.
How did she do this?
She was the first name on an “economic chain letter” called Social Security. Because SS indeed is the same as a chain letter – people at the top of the list collect money directly, dollar for dollar, from people lower down on the list who are paying into the system.
And today nobody in their right mind believes they are going to get out 1,000 times what they paid in, or even an equal value to what they paid into SS. Most people today rightly believe they actually will end up receiving much less in value than what they paid in except for poor people who paid in very little then live to be very old.
So do we conservatives really believe in “privatization”?
Yes. It would be the best idea. But actually we really believe in what Roosevelt originally claimed for SS when it was signed into law in 1937, but which went out the window early on – that Social Security would be voluntary.
That was just another Democrat deception, saying that we’re going to have this government system, but that you don’t have to join it, when in fact it simply became mandatory after a short period. That is like Obama saying that you can keep your health insurance when he knows darned well that his health-care bill is going to kill the private insurance industry and force you onto a government plan.
So imagine today that SS becomes voluntary. That means that all Republicans will opt out and all Democrats including college professors, public employee unions, teacher unions, lefty lawyers, doctors, feminists, gays and the rest will opt to stay in Social Security, right? Because SS is such a wonderful Democrat program that is saving the nation from poverty and so all Democrats will wish to support it, right?
Uh, sorry, folks, wrong. If SS participation ever became voluntary, the first people running for the exits would be Democrats, just as unionized public school teachers in more than a dozen states today do not pay into SS, and wouldn’t have it any other way. Because they know that Social Security is a huge economic farce, and they want no part of it.
No, if SS became optional, virtually every taxpaying Democrat in America would quit as quickly as possible while at the same time they defend SS to the bitter end - for other people, that is. It is just like millions of wealthy Democrats sending their children to expensive private schools, while politically supporting public education and teacher unions – for us ‘little people’, that is.
So here is an idea: Since Social Security is imploding, let’s pass federal legislation to repair it. And it will say just one thing for starters - that everyone who is registered as a Democrat in America will stay in Social Security, while everyone else can decide freely to stay or go. That way Democrats can show their love for SS.
Actually, that would leave SS destitute because everyone else will leave, and the pressure of the SS debt on those Democrats would force astronomical tax rises on them to keep the system solvent.
No, those Dems would never support legislation that forced only their hand and nobody else’s. Because Democrats love to talk one way and act the other. They do not really, personally support Social Security because they understand that the system is broke beyond recognition. But in their public discourse, they support it wholeheartedly. This is typical elitist socialism.
Actually, Social Security can never continue the way it has operated. Here is how it has worked:
As a growing American workforce in the post-World War II boom economy was paying large amounts into SS, the payouts were more than generous. In its first years, there were 42 people paying in for every person collecting a check. The payers did not notice how much they were contributing to the system because the total debit was just 2% of every check and wages and prosperity were going up, up, up. Meanwhile, the small pool of recipients just accepted their bountiful checks without a second thought.
Now, however, as payouts rapidly shrink and the ratio of contributors to collectors falls to just 2 to 1, there is no way that the generous payments can continue. So either benefits will have to be cut substantially just to keep them at their currrent level, or taxes will need to be increased dramatically.
What will the Democrats do?
The latter. Like they always do. They will push up the taxes to fund the program because it is they who run the program for their own political gain.
Over decades, the administrators of the SS program could have restrained the growth in payouts and kept surpluses building up. But they did not. They paid out more and more generously, and then commingled Social Security surpluses with general funds and spent it. Every last penny. So rather than building up trillions in surplus over the boom years, that money now is gone.
So now recipients who paid into the system all these years will demand that they get good payouts like their predecessors got. But that no longer is possible. So the Dems will propose only one answer – huge tax increases.
Today, SS taxes are 12.4% of every dollar you earn (6.2% employee and 6.2% employer, which is really all paid by the employee. The ‘employer contribution’ is factored into your pay ahead of time). Dems will push this up to 25% to keep the system working in their interest, and to make future generations poorer.
So the original debit for each dollar for SS was 2% and now is 12.4% and the “voluntary” system quickly went out the window. Now the nation is following it. And it is a long way down. Reform is essential.
Please visit my website at www.nikitas3.com for more. You can print out for free my book, Right Is Right, which explains why only conservatism can maintain our freedom and prosperity.