From: utzoo!decvax!harpo!npoiv!eisx!whuxlb!ech
Newsgroups: net.politics
Title: Re: Social Security - (nf)
Article-I.D.: whuxlb.968
Posted: Sat Jan 29 10:45:02 1983
Received: Wed Feb  2 02:26:59 1983

#N:whuxlb:10600002:000:2626
whuxlb!ech    Jan 25 00:36:00 1983

Let's try to concentrate on objectives, shall we?

The question is not so simple (and emotional) as "shall we let our parents
starve?" or "shall we let anyone take out more than they put in?"  The question
is what we, as a society, are trying to accomplish with Social Security,
and whether it meets those objectives.

One objective is to provide a "safety net," a transfer of income from those
who have more than they need to those who have less than they need.
Whether you call this a tax and a welfare program or an insurance policy
is of mainly emotional consequence.

A very different objective is to provide an annuity, an investment which
is expected to grow, which one pays into with the expectation that one
can draw from it when the funds are needed.

It is important to note that Social Security was conceived to meet the
first objective but, since taxes and welfare are EMOTIONALLY distasteful,
it has been "sold," since FDR's time, as an annuity.

It is also no secret that Social Security is a failure at both objectives.
As a welfare program, it clearly pays benefits to people who either don't
need them or need less than they receive.  Equally clearly, it taxes people
with higher incomes less than people with lower ones, and a large group of
people (federal and many state and local employees) don't pay in at all.
And SS is not, and never was, an annuity: FICA is not forced savings,
it's just another tax.

It's time to replace Social Security, simply because it doesn't meet its
objectives.

Note that I said replace, not abolish.  We can abolish or phase out the
payroll (FICA) tax pretty quickly: it only pays into general funds anyway,
but the phase-out necessarily means that other tax rates would increase.
As an alternative, we could raise the FICA rate, abolish the income limit, and
abolish all other taxes and, voila! a flat-rate income tax!

We can also phase out the "annuity" aspects on a gradual basis.  A gradual
shift in benefits calculations from one based primarily on payments made
to one based primarily on need would "break faith" with no one.

But don't expect anybody who ever expects to be elected again to come out
and advocate what I just suggested.  What you CAN do is write your
congresscritters and endorse the recommendations of the current blue-ribbon
committee and it's inevitable successors: the dinosaur which is Social
Security is already dead, and EVERYBODY knows it, but the body is big
and messy and will have to be buried in small, politically feasible bites.
The welfare program will, and should, continue, and you already bought into
an IRA, right?

=Ned Horvath=