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If you think that Senate hopeful Ken Buck called Social Security a “horrible policy,” then you've been listening to Senator Michael Bennet's lies.
Here's what Buck actually said in March: “It is certainly a horrible policy in what happened in the LBJ Administration back in the '60s when they took the money out of the trust fund to fund general fund programs, and what we ended up with was a system that will be bankrupt anywhere from 10 to 25 years from now.”
Obviously what Buck called horrible was funding general programs with Social Security taxes. He was not referring to the program itself.
And that's too bad. Because Social Security is a horrible policy. It punishes work and discourages savings. It subsidizes wealthy millionaires retired to the golf course with the sweat of impoverished workers.
It hurts those who die early, preventing them from leaving their accumulated wealth to their children or recipients of choice. Notably, this especially harms some minorities who, on average, die sooner.
The left, which glorifies progressive taxation, nevertheless loves the regressive Social Security tax, which hurts poor working families most of all. The Social Security tax currently strips a combined 12.4 percent (half paid by employers) of every worker's paycheck. Little could be more destructive to the ability of poor and middle-class working families to get ahead financially.
Contrary to popular mythology, Social Security is not some sort of investment program. It is instead a straight wealth transfer from workers to retirees. It is a major leg of the American welfare state. And, because of changing demographics, it will impose an ever larger burden on working families over the coming decades — unless the program is seriously reformed.
Does Buck want to “privatize” Social Security? In July, Buck said, “We've got to peg Social Security to [younger] individuals so those individuals have the ability perhaps to invest in various funds that are approved by the government. But those individuals also own that fund.” (We drew Buck's comments from PolitiFact.com.)
But apparently that tentative proposal is no longer on Buck's plate. On his web page Buck states that, for current beneficiaries, “government shouldn't change those benefits.” We agree, though we wouldn't be opposed to curbing benefits for the wealthiest recipients in order to lighten the load on working families.
Buck continues: “For older workers approaching retirement, we need to ensure that Social Security is solvent.” Again we agree.
For younger workers, Buck wants to preserve Social Security “as a safety net” while encouraging them to “save more through tax-preferred accounts.” This is a far better option than “privatizing” Social Security.
So why do we, your faithful free market advocates, oppose “privatizing” the program? Because the proposal known as “privatization” is the opposite of real privatization.
Buck tips the hand when he acknowledges that politicians approve (and therefore control) the accounts. Accounts mandated and controlled by politicians are not part of the private, free market economy. (The accounts are still mandatory if workers' only other choice is a welfare program.)
A major problem with mandatory accounts is that they create immediate deficit spending. The basic idea is that a portion of one's payroll taxes are redirected from paying off current beneficiaries into the accounts. What then fills in the gap? More borrowing.
Moreover, the accounts themselves do nothing to actually reform Social Security. To understand why, consider that the money redirected to the account could instead simply be returned to those who earned it, to spend or invest as they see fit. For instance, somebody might want to put that money into his own business, rather than into a politically controlled account.
We're glad that Buck backed off of his suggestion to “privatize” Social Security. His incremental reforms are a far better way to go. We remain a bit nervous, however, about the “tax-preferred accounts,” which could unduly restrict how people use their own money and lead to political controls over those accounts.
Let us, then, offer a suggestion for real free market reform. We should phase out Social Security entirely.
Here's how it could work. The benefits of current recipients would be left untouched. Every year, the payout-age for Social Security (not to be confused with one's chosen age of retirement) would be increased by a few months. So people close to retirement would lose a little bit of their benefits, while those further away would lose more.
So what's in it for younger workers? With a steadily increasing pay-out age, the Social Security burden would slowly diminish. The tax should be reset every year to just cover benefits. Thus, the Social Security tax would shrink over time, eventually to zero, leaving workers with an ever-growing share of their own income to spend or invest as they see fit.
We have a simple name for such a reform: Freedom.
Linn Armstrong is a local political activist and firearms instructor with the Grand Valley Training Club. His son, Ari, edits FreeColorado.com from the Denver area.
Here's what Buck actually said in March: “It is certainly a horrible policy in what happened in the LBJ Administration back in the '60s when they took the money out of the trust fund to fund general fund programs, and what we ended up with was a system that will be bankrupt anywhere from 10 to 25 years from now.”
Obviously what Buck called horrible was funding general programs with Social Security taxes. He was not referring to the program itself.
And that's too bad. Because Social Security is a horrible policy. It punishes work and discourages savings. It subsidizes wealthy millionaires retired to the golf course with the sweat of impoverished workers.
It hurts those who die early, preventing them from leaving their accumulated wealth to their children or recipients of choice. Notably, this especially harms some minorities who, on average, die sooner.
The left, which glorifies progressive taxation, nevertheless loves the regressive Social Security tax, which hurts poor working families most of all. The Social Security tax currently strips a combined 12.4 percent (half paid by employers) of every worker's paycheck. Little could be more destructive to the ability of poor and middle-class working families to get ahead financially.
Contrary to popular mythology, Social Security is not some sort of investment program. It is instead a straight wealth transfer from workers to retirees. It is a major leg of the American welfare state. And, because of changing demographics, it will impose an ever larger burden on working families over the coming decades — unless the program is seriously reformed.
Does Buck want to “privatize” Social Security? In July, Buck said, “We've got to peg Social Security to [younger] individuals so those individuals have the ability perhaps to invest in various funds that are approved by the government. But those individuals also own that fund.” (We drew Buck's comments from PolitiFact.com.)
But apparently that tentative proposal is no longer on Buck's plate. On his web page Buck states that, for current beneficiaries, “government shouldn't change those benefits.” We agree, though we wouldn't be opposed to curbing benefits for the wealthiest recipients in order to lighten the load on working families.
Buck continues: “For older workers approaching retirement, we need to ensure that Social Security is solvent.” Again we agree.
For younger workers, Buck wants to preserve Social Security “as a safety net” while encouraging them to “save more through tax-preferred accounts.” This is a far better option than “privatizing” Social Security.
So why do we, your faithful free market advocates, oppose “privatizing” the program? Because the proposal known as “privatization” is the opposite of real privatization.
Buck tips the hand when he acknowledges that politicians approve (and therefore control) the accounts. Accounts mandated and controlled by politicians are not part of the private, free market economy. (The accounts are still mandatory if workers' only other choice is a welfare program.)
A major problem with mandatory accounts is that they create immediate deficit spending. The basic idea is that a portion of one's payroll taxes are redirected from paying off current beneficiaries into the accounts. What then fills in the gap? More borrowing.
Moreover, the accounts themselves do nothing to actually reform Social Security. To understand why, consider that the money redirected to the account could instead simply be returned to those who earned it, to spend or invest as they see fit. For instance, somebody might want to put that money into his own business, rather than into a politically controlled account.
We're glad that Buck backed off of his suggestion to “privatize” Social Security. His incremental reforms are a far better way to go. We remain a bit nervous, however, about the “tax-preferred accounts,” which could unduly restrict how people use their own money and lead to political controls over those accounts.
Let us, then, offer a suggestion for real free market reform. We should phase out Social Security entirely.
Here's how it could work. The benefits of current recipients would be left untouched. Every year, the payout-age for Social Security (not to be confused with one's chosen age of retirement) would be increased by a few months. So people close to retirement would lose a little bit of their benefits, while those further away would lose more.
So what's in it for younger workers? With a steadily increasing pay-out age, the Social Security burden would slowly diminish. The tax should be reset every year to just cover benefits. Thus, the Social Security tax would shrink over time, eventually to zero, leaving workers with an ever-growing share of their own income to spend or invest as they see fit.
We have a simple name for such a reform: Freedom.
Linn Armstrong is a local political activist and firearms instructor with the Grand Valley Training Club. His son, Ari, edits FreeColorado.com from the Denver area.
