Democrats love to slam Republicans for promoting “risky schemes” to privatize Social Security, even when the Republicans in question have no power over the program.
The people who make these charges must believe that they resonate with enough of the population to make a difference. And I suspect they’re right.
To be sure, investments in the stock market (which is to say, American companies that employ us and sell us goods and services we want and use every day) have been in the tank for a while now. (I should point out, though, that much of the damage has been done not by poor business decisions, the business cycle, or corporate fraud, but by unwise government policy, but I digress.)
The choice in retirement planning is not between “risky stock investments” and “safety.” It’s between business risks and political risks.
Who do you trust more: The millions of people who go to work every day in corporate America, or the 435 people who work in the United States Congress?
Sure, you can decry any and all proposals that would allow people to dedicate some of their Social Security taxes towards bonds or stocks. Feel free to do so if you trust the politicians and the political process to make your decisions for you.
I recall seeing an editorial cartoon on the subject of Social Security, back in the mid-1970s. It featured several men, walking in single-file, each with a backpack. Each backpack had a year on it: 1938, 1955, 1965, 1975, and so forth. Each backpack also had a ratio: 20:1, 15:1, 10:1, 5:1, 2:1, or something like that. Those ratios represented the number of workers required to support one person getting a Social Security check. As the ratios moved from 20:1 down to 2:1, the backpack got larger, and each successive man was more hunched over than the previous one, laboring under an increasingly heavy load.
In other words, we’ve known for a long time–decades–that Social Security is in trouble. The problem isn’t Republican or Democratic. It’s demographics: As population growth tapers off and people live longer, the load on each wage earner grows heavier.
And what have the people in charge of Social Security–Congress-done about it?
NOTHING.
I take that back. They have in fact done a few things: Decrease your take-home pay by increasing Social Security taxes, and take away benefits by taxing people who get “too much” in their monthly check. Oh, and they’ve also raised the retirement age, meaning you have to work longer as you pay that heavier tax.
And that, dear reader, is what you get from political risk–putting your trust in politicians.
From The Detroit News: http://apps.detnews.com/apps/blogs/watercooler/index.php?blogid=943