Friday, April 29, 2005

Killing the Golden Goose

Last night President Bush (transcript) recommended that yet another layer or progressivity be added to Social Security in an effort to 'reform' it. This is on top of the progressive benefit calculation formulas and the taxing of benfits for incomes over $32,000:

"First, millions of Americans depend on Social Security checks as a primary source of retirement income, so we must keep this promise to future retirees as well. As a matter of fairness, I propose that future generations receive benefits equal to or greater than the benefits today's seniors get. Secondly, I believe a reformed system should protect those who depend on Social Security the most. So I propose a Social Security system in the future where benefits for low-income workers will grow faster than benefits for people who are better off.

By providing more generous benefits for low-income retirees, we'll make this commitment: If you work hard and pay into Social Security your entire life, you will not retire into poverty.

This reform would solve most of the funding challenges facing Social Security."

Where does progressive policy leave off and socialism begin?

High income earners will soon figure out that Social Security is just a big wealth transfer, welfare system. For them, it may be better to proceed with the alternative Bush alluded to:

"...Or there'll be dramatic benefit cuts as time goes on."

Porkopolis believes this altenative to be a more honest, grown-up approach to resolving the problem. If only Bush had the courage to make the following pronouncement:


"My fellow Americans. Our Social Security System is a pyramid scheme. It's unsustainable in its current structure. The originally well intentioned program will start paying out more than it collects by 2017. Everyone has until about 2041 to get your finances in order. The program, if we stay on its current course, will be bankrupt around then.

At that time, these United States will not be in a position to deliver on the unreasonable promises of risk free retirement income. So, everyone is on notice that you are personally responsible for your own retirement. If you're not already setting aside money for this eventuality, I strongly suggest you start now.

Lest we be accused by future historians of 'wanting our cake and to eat it as well', I ask you to keep in mind that continuing to work into your latter years is also a viable option. We're all benefitting from medical developments that allow us to live well beyond the age of 65; the age at which the original designers of Social Security thought many of us would already be dead.

Forewarned is Forearmed!"


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