Tuesday, November 9, 2010

Beware the Retirement Political Trap

Ron Paul and other libertarians are increasing the volume of their demands for Social Security overhaul. That's a fine and honorable goal, I suppose, without knowing any of the details of their plan, but it is a dangerous political gamble that could lead the GOP into another black hole in 2012 and beyond.
Here's why.
I don't think it makes any difference what we call it - welfare or social insurance or trust fund - the truth is that the vast majority of Americans have for several generations considered Social Security as a fundamental part of their retirement planning. And with good reason. They have paid monthly or quarterly taxes that have been considered payments to enhance their retirement income. And those taxes / payments have degraded their capacity to invest for their retirement in other ways to the extent they would have needed to in order to replicate Social Security payments.
So, it seems the United States government has entered into a contract with these Americans which we are bound by honor to fulfill.
If we want to create another contract with younger Americans, refund their Social Security payments and tell them it will now be their responsibility to provide for their own retirement needs, that would be acceptable, or at least comprehensible.
The 2010 mid-term election represents many things - reductions in tax burdens, smaller government, less federal intervention in state and individual affairs - but, to undercut the "Social Security contract with America" in such a vital area as retirement seems to me, a lifelong Republican and advocate of fiscally responsible government, to be the recipe for disaster for the GOP. And rightly so. 

 

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