January 08, 2005

The Schwartz is weak in this one

Barry Schwartz:

There are three arguments being made in favor of privatizing part of Social Security. First, the Social Security Trust Fund needs money and privatization will, in the long run, increase the amount of money available to retirees. Second, privatization will give people choice, and choice is good. And third, “it’s your money,” and you ought to be able to do with it as you wish.

Each of these arguments is dubious, or disingenuous, or both.

To use a popular phrase from the 1950s and ’60s: “What a pinko leftist commie.”

First, it doesn’t take an economist, much less a professor of psychology, to figure out that 401K plans are giving better long-term return rates than Social Security. So actually, yes, Mr. Schwartz, privatization would put more money in the Social Security Trust Fund.

Second, yes again, Mr. Schwartz, privatization, of some level, would give people more choice over how to save their retirement money. With my 401K plan, I have a range of funds to choose from. Should I not make as much money at the end of the year, that is as much my fault in picking a particular fund as it has to do with the fund manager’s choices in the companies placed within the fund.

Finally, it is my money, you pompous, socialist twit. I can see the money coming out of my check and being deposited in to the largest legal Ponzi scheme (as an accountant I am fond of likes to refer to Social Security—hi, Fred!) in existence. The money I don’t see is the matching funds my employer has to put in to the largest legal Ponzi scheme in existence. Money that I could be taking home with me, money I could be investing in something with far better long-term returns, money that would generate me more in a simple savings account than I will see back from Social Security when I’m 80, or whatever the age will be when I retire.

I should be able to do with my money whatever I wish. If I want to work on my retirement funds by going down to the dog track and betting on the one that does his business just before the race, then that’s my business. If I want to dump it all in my best friend’s fad-of-the-moment business, that’s my business, too. It’s not your job, Mr. Schwartz, to ensure that I have money to live on when I’m old. It’s not the government’s job, either.

I’m not saying a partial or total privatization of Social Security is the answer. I’m saying that a President and members of Congress need to put the good of the nation before their re-election bids and have the guts to kill Social Security. Pick a year, grandfather in all persons born in that year, and the rest of the population is on its own. There will be a generation or two that will have to both fund Social Security and pay for their own retirements. I would hope there is a generation or two willing to do that, if it means their children and grandchildren wouldn’t have to worry about funding the largest legal Ponzi scheme in existence.

Posted by retrophisch at January 8, 2005 04:48 PM | TrackBack