Reforming Social Security - Part 5
This is only part of the article. For the full article you will have to subscribe the Wall Street Journal's OpinionJournal's Political Diary. (emphasis below are mine)
Bush Steals His Best Idea from a Democrat
Republican members of Congress have a ready response for Democrats crying foul over President Bush's constant references to Franklin Roosevelt and other icons of liberalism to bolster his call for Social Security reform.
They note that in an address to Congress on January 17, 1935, President Roosevelt foresaw the need to move beyond the pay-as-you-go financing of the current Social Security system. "For perhaps 30 years to come funds will have to be provided by the States and the Federal Government to meet these pensions," the president allowed. But after that, he explained, it would be necessary to move to what he called "voluntary contributory annuities by which individual initiative can increase the annual amounts received in old age." In other words, his call for the establishment of Social Security directly anticipated today's reform agenda: "It is proposed that the Federal Government assume one-half of the cost of the old-age pension plan, which ought ultimately to be supplanted by self-supporting annuity plans," FDR explained.
"What Roosevelt was talking about is the need to update Social Security sometime around 1965 with what today we would call personal accounts," says one top GOP member of the Ways and Means Committee. "By my reckoning we are only about 40 years late in addressing his concerns on how make Social Security solvent."
When Social Security was started, it was introduced to the public as a government program that would help the elderly to survive during the Great Depression. I know this to be the truth because my parents were there. They were both teenagers in the 30's and remembered what was said and how it was presented. Later on, officials said it was only intended as a supplement to whatever other pension or savings was held when the retiree was eligible for SS benefits. Back in the 30's when SS was introduced, there were 16 (I've heard figures up to 32) people working and contributing to SS to pay benefits for every person receiving benefits. I've heard that only two people are contributing for every pensioner receiving benefits today.
What we have here is a gigantic Ponzi scheme, also known as a pyramid scheme. A pyramid scheme is where the initial investors receive payments from people coming in under them. This is illegal, people! If you or I were offering a scheme like this, we'd be arrested! I don't want to get into a lot of metaphors and cliches, but this is a house of cards getting ready to tumble down on top of a lot of people who need those benefits.
FDR, who was the designer of the Social Security program saw that this system was good for about 30 years but would have to be changed somewhere down the road. And there are some politicians out there who think it's fine for another 50 years.
I can see three reasons these politicians have their heads in the sand:
1 - They want their constitutents to continue to be afraid that the big, bad Republicans will take their money away from them. If the politicians can keep their constitutents afraid, they will be able to keep their seats in Congress. Some are calling this political slavery. I call it abuse. It's nothing more than an abusive husband telling his wife that she can't survive without him. And if their constitutents find out they've been lied to by their Congressional reps all these years, someone's head is going to be on the block. And they are afraid it will be theirs.
2. They are afraid that if they take a good look at it, they will find out that the "lockbox", which doesn't exist in the first place, is full of IOU's from both the Republicans and Democrats who have been using SS money for other programs over the years.
3. If they admit that SS is in trouble, they also have to admit that Bush is right. And, by God and by everything that they hold dearly, they could never admit that Bush is right about anything!
I'm not sure they aren't most afraid of #3.
And the voters haven't been much better. Too many of us had our heads in the sand as well. If we can't see the problem, well, then it must not exist. Too many listened to the Democrats and were afraid that our elderly would lose the benefits that they need to survive their "golden years." Too many listened to the Democrats and believed that the evil Republicans wanted to rob us of the benefits we worked for all our lives. And too many believed that there was no problem at all.
If Congress had heeded FDR's advice, we wouldn't be having this discussion now. Yeah, you're going to say that it was fixed in 1965 or thereabouts. Uh-huh, it wasn't fixed. It was just tinkered with. If Congress had listened to FDR, we would have personal savings accounts in SS right now and everyone would be a lot better off.
Look at Chile and Galveston Texas for models of a good Social Security plan. It's never too late to change a system that was never a good system in the first place, to a system that will work for future generations.
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