Time To Educate On Social Security Reform
By Vincent Fiore (02/09/05)
What used to be commonly referred to as the “third rail” of politics is now the main domestic priority of the Bush administration. Social Security figured prominently in the president’s State of the Union address.
Social Security reform was present as far back as the 2000 presidential campaign as well, when George W. Bush told the electorate that “now is the time to do the hard things.”
Some Republican Senate and House candidates campaigned on it, and won.
So why do so many Americans remain so backward and misinformed over Social Security, specifically about the concept of ownership and control of their own money, and their retirement?
Social Security wasn’t dubbed the “third rail” of politics without good reason.
If a politician even dared to even broach the subject--and by politician, I mean a Republican--he or she could expect a reaction from the left and the mainstream media so demagogic in content as to make those candidates wish that they had campaigned on something tamer instead--like eliminating the mortgage deduction on home ownership.
Even though Bush has gone a long way toward eliminating the once-fatal shock that Social Security inflicted upon the brave or foolish seeking to make it part of the political discussion, he has miles to go.
Bush must get the public to not only come to grips with the fact that the program is headed for a fall, but also to embrace the thoroughly common sense proposal of “personal retirement accounts.”
To most of us who are part of the investor class of America--over 50% and rising--the idea of control, in this case partial control, of your own money is a concept not even worth debating. Who should have control of your money if not you?
But decades of verbal assaults and political fear-mongering have left their mark upon the malleable among us. Not only are the politicians faint-of-heart in dealing with Social Security reform, but the public is equally paralyzed to a degree in searching for the answers.
President Bush used the word “crises” a few weeks ago when describing the precarious state of Social Security. Democrats swiftly pounced upon Bush, relying upon the time-approved and comforting words of fear.
Sadly, Bush pulled back on his “crises” claim, instead saying words like “troubled” and “outdated.” But in my mind, he was right the first time.
Life, for all its improved longevity since the inception of Social Security in 1935, is still too short for my liking. One can never start planning early enough on the eventuality that he is going to get old. Odds are, he will. Personal wealth makes old-age life enjoyably livable. Today’s young Americans need to know this.
We could start by instilling more basic economic courses in our overly politically correct schools. We need to teach what an economic struggle a lifetime can be. We need to teach the value of money, and show people how to make it work for you. We need to open up the possibilities of a capitalistic society if only to give people the politically-free facts, and a choice.
President Bush is attempting to do this through his oft-stated vision of the “ownership society,” and Social Security reform is a big part of it. Unlike FDR’s “New Deal” after the Great Depression, it is a society based on ownership, and not dependency.
As we begin to see the basic outlines of the Bush plan for Social Security reform, like the passing on of benefits to family, and the imposed safeguards against over-zealous investing, listen to what those who line up against it are saying.
Besides the usual sneering and knee-jerk political reaction, they are saying nothing else about a system that is definitely headed for a crash. In ten years time, some 75 million people will be collecting from the system, which will hasten its decent into insolvency in 2042.
Democrats are still playing politics with the biggest economic issue of our future, while hesitant Republicans are still cowed for fear of bad press and a perceived constituency rebellion.
Has the GOP learned nothing by watching eight years of Ronald Reagan, and now George W. Bush? Talk to the people. They want to know.
As for the radical-ness of Bush’s plan, here is much of the same from another “radical” of our time:
“When I left office, there was enough money to keep Social Security going till 2053, enough money to keep Medicare going until 2027, through half the life of the baby boomers. I don't know what the latest numbers are going to show but they won't be good. If we don't modify the tax cut to have more tax cuts now but we reinstate fiscal responsibility over the long run, we're going to be in real trouble there. So, what's our option? If you don't like privatizing Social Security and I don't like it very much, but you want to do something to try to increase the rate of return, what are your options? Well one thing you could do is to give people one or two percent of the payroll tax, with the same options that Federal employees have with their retirement accounts; where you have three mutual funds that almost always perform as well or better than the market and a fourth option to buy government bonds, so you get the guaranteed social security return and a hundred percent safety just like you have with Social Security.”
-Bill Clinton in remarks to the Democratic Leadership Committee on December 3, 2002, New York.
I have yet to hear cries of panic over the words of Bill Clinton. Why do we hear them in regard to the words of President Bush? In a political environment where power predates progressive changes that reflect a changing economic reality, it is simply party over people.
When that happens, it is time for the president to teach the public to become citizen politicians, and demand change.
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