Social Security

Caring for our elders is the collective responsibility of society, not an individual responsibility.

While I try to stay informed, I do what I can to stick to the news and avoid political commentary – it just gets my blood pressure up. But every now and then something slips through my filters and raises said blood pressure to the point where I have to say something. This is one of those times.

I’ve had it with Rick Perry and Rush Limbaugh all the other right wing talking heads calling Social Security a “Ponzi scheme.” This is not a debate tactic. It is not a policy proposal. It is not political theory. It is a lie – a deliberate falsehood told with the intent to deceive and manipulate.

The intent is to associate Social Security – the most effective and, dare I say it, the most loved government program in the history of this country – with a white collar criminal who enriched himself by deceiving his clients. Nobody knows who Ponzi was, but everyone knows his disciple Bernie Madoff, who is justly rotting in jail.

Social Security has always been the “third rail” of politics – touch it and die. That’s a problem for politicians who are philosophically opposed to it. The human brain doesn’t work on logic, it works by association. Say “Social Security” and “Ponzi scheme” in the same sentence enough times and people will start to associate the two. That can finally make it possible for politicians to abandon the collective care of our elders without losing their elected offices.

Caring for our elders is the collective responsibility of society, not an individual responsibility.

The facts aren’t in question. Social Security isn’t an investment scheme, legal or otherwise. It’s a public pension plan. It operates on the principle of collective responsibility – each generation pays for the retirement of today’s elders and its retirement will be paid for by tomorrow’s adults.

There are some aspects of the plan that invite confusion, especially by those who want to be confused. Those who pay more Social Security taxes while working will draw more benefits once retired, up to a point. That ceiling is used to justify a cap on Social Security taxes – no taxes are collected on income over $106,800 per year. And due to the increased payouts expected when the baby boomer generation retires, taxes were raised and supposedly placed in a “trust fund” to be drawn down in later years. But the facts remain – Social Security is a public pension program, not an investment plan.

Caring for our elders is the collective responsibility of society, not an individual responsibility.

The idea of retirement is very new. In tribal societies, elders simply worked less as their capacities declined. Of course, in tribal societies, not a lot of people lived to be very old. Throughout most of civilization, families have cared for their parents and grandparents – thus the motivation for large families, to insure that someone could take care of you in your old age. But in almost no situations were people expected to take care of themselves up the the point of death.

Where there were no adult children to care for their elders, or when those adult children didn’t have the resources, it went badly for the elders. Even if we wanted to return to a “your children are your retirement plan” arrangement, modern Western society has destroyed the extended family. If there are no jobs where you live, you’re expected to move to where the jobs are. I’ve done that three times, moving from Tennessee to Indiana to Georgia to Texas. It’s hard to take care of your parents and grandparents when they’re half a country away.

Caring for our elders is the collective responsibility of society, not an individual responsibility.

And so we’ve developed other arrangements for caring for our elders. I remember the HR presentation on retirement when I started my professional career in 1984. It said “financing retirement is a three-legged stool: employer pensions, Social Security, and personal savings.” Employer pensions are all but gone – small businesses never had them and corporations say they can’t afford them. This puts even more pressure on personal savings. Over the last 4-½ years the balance in my retirement account has gone up 3% (in total, not per year), even though I’m saving 12% of my pay and my employer is adding another 3%. My rate of return is negative. If I was nearing retirement I’d be seriously worried – as it is I’m just hoping the economy improves enough for it to start growing again before I get too much older.

At least I make enough that I can save – people in low-wage jobs need all they make and then some just to get by.

If you’re very frugal or very lucky – or if you’re rich to start with – you can finance your own retirement. The majority of us can’t.

Caring for our elders is the collective responsibility of society, not an individual responsibility.

The opponents of Social Security feed people’s evolutionary selfishness and suspicion of others.

“Why should I have to pay for someone’s retirement when they weren’t responsible like I am?” This is the part of the lone wolf myth Perry et al are trying to popularize. Maybe they were irresponsible or maybe they had bad luck or maybe they never made enough to be able to save. As the current economy has shown, you can do all the right things and still end up screwed.

“Why should I have to pay for someone’s retirement when they don’t need Social Security?” This is the other side of the lone wolf myth. The fact is that very few people “don’t need” Social Security. Keeping them in the system reinforces the idea of collective responsibility and collective benefits.

“I could do better if I took the Social Security taxes and invested them on my own.” Maybe you could and maybe you couldn’t – see my own example above. More importantly, would you?

You pay hundreds if not thousands of dollars each year for car insurance – odds are you rarely collect on that. Is car insurance a scam? No, it’s the principle of shared risk – you pay a little now to eliminate the risk of having to pay a lot later.

“Social Security is unsustainable – we have to end it.” This is simply not true. Even if we did nothing, future benefits would still be roughly 75% of what’s been promised. That’s not good, but it’s hardly reason to blow up Social Security. With small tax increases and a reasonable increase in the retirement age, Social Security can be sustainable indefinitely.

This doesn’t mean there aren’t structural problems or that there are no instances of gaming the system or that Social Security can never be changed. But the bottom line is that for all its shortcomings, Social Security is the #1 reason why most elderly people in this country aren’t living in poverty.

Caring for our elders is the collective responsibility of society, not an individual responsibility.

We need to rethink retirement.

In a society where people live longer, it’s reasonable to expect people to also work longer. But is it reasonable to have the same retirement age for construction workers and office workers? Is it reasonable to expect people to carry a full workload right up until they retire and then shift to idleness?

If there were more jobs suitable for older (and by “older” I mean 70, not 50) workers – part time, not physically demanding – then we’d need to pay fewer retirement benefits. We’d also stop throwing away valuable economic and societal resources – an extravagance we won’t be able to afford once the impact of lower birth rates hits.

In the end, though, this is not an economic or a political issue. It’s a moral issue. It’s a religious issue. We cannot be a good, moral society if we don’t take care of our elders. If any politician (or anyone else) has a better idea on how to accomplish this goal – for everyone, not just those who work for the right companies and pick the right mutual funds – then I welcome it.

But stop attempting to associate our current social contract with a criminal scam.

Caring for our elders is the collective responsibility of society, not an individual responsibility.