In a free society, government exists to serve its people. In one that is not free, people are a tool of government. By this standard, anyone following the current debate on Social Security reform would have to conclude that we are living in a society that is increasingly less free.
Earlier this year I wrote a column about Social Security reform. I urged then that perspective not be lost that the central issue for reform is evaluating whether the Social Security system properly serves individual citizens. This, sadly, is not happening. The debate has focused entirely on how to prop up the system.
Social Security is our nation's largest government program. Eighty percent of taxpayers pay more in Social Security taxes than income taxes. Yet, despite the size and scope of this program, there is not a single political leader, including those discussing introducing some element of private accounts, who is questioning the fundamental merits of the system and whether we should have it at all.
I have been involved with Social Security reform for almost 10 years, as an advisory-committee member of the Cato Institute's project dealing with reforming Social Security and, more recently, with Jack Kemp's efforts to advance the idea of enacting private retirement accounts.
In my view, there is only one honest approach to Social Security: fulfill obligations to pay benefits to those who have already paid in and allow the rest of us as quick and expeditious an exit out as possible. Then shut the doors forever.
If this seems radical, I'll ask one question. If Social Security did not exist, and we attempted to enact today a system like we currently have, would it pass? The answer is unquestionably no. There is no way that any working American would agree to turn over to the government 12.4 percent of his or her paycheck in exchange for a benefit that has no guarantee, on which ownership has been relinquished and that is less than what could be obtained by buying risk-free government bonds. No way. Zero chance.
If no working American in his or her right mind would buy into Social Security today if there were a choice, then what does it mean, in our supposedly free society, that there is not a single politician who will openly discuss giving us the option to get out? What it means is that Social Security reform, as currently discussed, is focused on bailing out politicians and not American citizens. When politicians tell us that they are dedicated to "saving Social Security," they are telling us that they know the system no longer works, but they don't have the courage to end it. They are telling us they don't want to do the hard work of figuring out how to meet obligations to those who have already paid in and allow working Americans the option to exit from a very bad deal.
Rather than looking for opportunities to raise money to meet obligations by cutting the substantial fat out of our federal budget, or by looking for creative means for borrowing funds to meet obligations, politicians will shift the burden to us. They will raise our taxes or our retirement age or cut our benefits so they can "save the system."
Soon after I got off welfare, I started my own business. The first thing I discovered was the "self-employment tax." An entrepreneur who starts up a business is immediately forced to fork over more than 15 percent of earnings to the government, 12.4 percent of which is the Social Security tax. That was 20 years ago. If over those years I could have been putting those funds into my own retirement account, I would be considerably wealthier and would own a nice nest egg today.
They want to save this system? No thank you.
Of course, our nation should have a safety net for the unfortunate. But, in a free society, individuals should first be allowed to succeed before government decides it should step in. Social Security does the opposite. It first takes your money, assuming that you can't take care of yourself, and then leaves you whatever is left over. This makes sense in the USSR, not in the USA.
Mean household wealth among African-Americans today is less than $6,000. These folks do not need to be saved by raising their retirement age or their or anyone else's taxes. They need to be saved by being allowed to be free and keep and save what they earn.
Where are today's leaders? Where are our honest men and women?