On the Other Hand...

by Jim Davies 

The Social Security Dragon


It's been described as the "Third Rail of Politics"; for if you touch it, the experts say, you die. I know of no principle more religiously followed by the spineless population of Capitol Hill, than to keep their feet well clear.

Not only don't they touch it, they make a loud virtue out of NOT touching it; even as the new brand of Fearless Republican Budget Cutters shave their microscopic foil off the Federal Spend, they stop every five minutes to remind anyone who might be listening, especially the "Liberal" Media, that Social Security is "absolutely off the table." That's despite the obvious fact that we shall see no serious reduction in government until they do.

They even call it an "entitlement", just as if the dictionary definitions of English words could be changed at the whim of politicians.

There is, of course, a truly wicked fiction abroad that very many of the tens of millions of victims of the Social Security Scam sincerely believe: that they are entitled to something out of the SS because they have "made contributions", just as if they had been paying insurance premiums all these years.

It's not all their fault, for those were the words carefully selected by the designers of Social "Security"'; its very name is, "Social Security Insurance"! It bears no true relationship to any honest insurance policy on the Planet, but that's what they call it and so that's what many folk believe it to be.

The true and ugly fact is that they have no such entitlement, for no trust fund was ever amassed, nor any policy contract signed. The SS is a "pay as you go" scheme: everything we are forced to pay today goes straight to beneficiaries, and if and when our turn comes, the next generation will be forced to fund our retirement, under threat of having their own lives blighted. This monster is, therefore, shaped precisely to foster inter-generational warfare.

It takes a full one third of the Federal Spend, or about $500 billion a year. Neither Republicans or Democrats have shown the least intention of slaying this dragon, so you and I must look elsewhere if it is not to consume us all. 

The Sword

Given the will (which is, admittedly, the key problem) it's not all that hard to slay it. There are several possible ways - several designs of sword.

None of them, however, is entirely "fair". We have all suffered a massive ripoff, and as with other forms of grand theft, it may be impossible to make everyone perfectly whole. That sad fact ought not to deter us. Here's my suggestion for doing at least a half way decent job.

I'll show later where the money is to come from, but this is the nub of it: on the happy day the SS is terminated, a capital sum would be presented to most households in the country and its size would favor those who are most exposed when the plug is pulled on the SS. $200,000, for example, could go to every household with a breadwinner aged 65. Those with an older head might receive a sum smaller by $10,000 for every year of age over 65 - for example, the handout would be $100,000 if the age were 75, and so on with a $50,000 minimum.

For households with a head aged between 45 and 65, there would be a similar handout: $10,000 for every year of age over 45. So at age 60, for example, the household would receive $150,000. Exact figures matter less than the principle.

That done, the SS scheme would be totally dissolved and its taxes (total rate: 15%) terminated. Everyone would then be on their own. Those under 45 would get nothing. No, that's not fair, of course it's not; like I said, there's no solution that's totally fair. But those folk have the best chance to form their own retirement nestegg. And the older folk who did get a handout would be well advised to buy annuities - those are honest insurance plans that take a capital sum and convert it into a lifetime income - but the choice would be theirs.

The Pot of Gold

Now for where that money would come from - and first, notice how much it would have to be. I've done some rough calculations and reckon that on D-Day (the day the Dragon is finally slain) the needed handouts would total about $6 trillion. Now, yes, that's a tidy chunk of change. It's equivalent to the entire Gross National Product of the United States for a whole year.

It's also equivalent to roughly one tenth of the US Government assets - and that is where the money would come from. During some period (say, a year) prior to D-Day, the Feds would sell off one tenth of everything they own, so as to raise the $6T required.

First on the auction block would, of course, be all those Federal buildings that house the SS Administration, along with their computers. Their proceeds would not go very far, but the symbolism would be magnificent. Then would come some of the vast holdings of land to which the Feds have siezed title (including, I hear, 90% of Alaska!) and the right to use TV channels.

From one viewpoint I'd like to see most of their nasty military toys sold off too - but perhaps they should be destroyed instead. Those swords ought to become ploughshares; they are lethal in anybody's hands. Certainly, however, the military should be obliged to sell off some of its prime real-estate.

Whatever the detail, there's the principle: a one-time auction of about 10% of the assets of the US Government.

D-Day results: (a) an end to the racial discrimination of the SSS, (b) a huge investment in the productive economy, (c) peace between the generations, (d) smaller government and (e) the chance for all at work to plan for a retirement three or four times more prosperous than today. Not a bad day's work.

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