SOCIAL SECURITY
I deeply appreciated every comment on my post yesterday, outlining 10 things I would call for if running for president. I said at the outset that because of its cursory nature, I couldn’t dig down on every nuance but it generated such good feedback that I intend over the next several days to answer the concerns. To keep these short and sweet, I’ll deal with only one a day.
First, the most important thing to remember is that this was all FEDERAL, not state, and not local. In other words, if a state wants to do ANY of the things I would eliminate from federal, that’s perfectly fine. The framers of our republic envisioned a multi-state experiment. The states had the power and the federal was simply an over-arching, extremely small, umbrella. Until Lincoln, we had no USDA—can you imagine? We had no federally-funded land-grant colleges. We had no IRS. No Social Security. This is why we had an electoral college, to preserve the power of the states from smallest to greatest. And a Senate. Everything was designed to give states the freedom to do things the way they wanted, except for specific things designated in the Bill of Rights.
Now, on to Social Security. Notice I said “phase out.” Folks who paid in should get everything they’ve been promised. Fulfilling government promises is one of the most important elements of restoring trust. Right now, it seems like when the president or cabinet-level appointee opens his mouth, he’s lying. That has to stop.
I don’t have all the nitty gritty answers on exactly how the phase out formula works, but plenty of people smarter than me have wrestled with this and have workable solutions. Generally, the idea is to either let people do their own thing or mandate the FICA withholding but it goes into private investments. I prefer starting at a certain age, like 21, and eliminating FICA.
Several localities around the country have opted for private investment for their employees and all of them have outperformed Social Security by about 5 times—money in versus money out. Social Security is definitely one of the worst investments you can make, for return on investment. I don’t like mandates, but if that’s what it takes to eliminate Social Security, that’s a good first step. Mandate it but it goes into mutual funds of your choosing or whatever.
The bottom line is you simply cannot let the federal government have access to that much money. It corrupts policy, principle, and performance. The first step in shrinking the federal government is defunding its biggest sources of revenue. Remanding all that money to private decision-making would eliminate the temptation to spend it, which is exactly what they’ve done. Goodness, had the Social Security Administration simply transferred all that money to private investment since day one, it would be solvent. But you can’t dangle that big a pool of money in front of politicians and expect them to keep their grubby hands off it.
For the record, Teresa and I are refusing to enter Medicare. We’ve paid thousands and thousands of dollars over our working career into the system, but are not going to take it because we don’t want a bureaucrat telling us what doctors to go to. The doctors we like don’t take medicare, preferring freedom to make their own decisions. We have no desire to put our health in the hands of people like Fauci. We’re deferring our Social Security for as long as possible.
I have no desire to retire. When you’re having this much fun and have a mission with this much purpose, why would you want to quit? To be sure, if a state wanted to pick up a Social Security alternative, that would be perfectly fine. Some would and some wouldn’t. The bottom line is that the federal government is not authorized in the Constitution, anywhere, to make sure we have money when we get older.
The American idea promoted liberty and independence, not dependency on the government. That was unique and special to this country, and served us quite well until Franklin Roosevelt, the socialist, decided to turn us into dependent children. What a shame. Imagine if all the money the average American pays out in FICA withholding each year (matched 50/50 by employers) had been invested in the private sector. You’d have 5 times as much coming back in retirement. And if you failed to do it, you’d be dependent on philanthropy, but lots of folks would have extra money to give if the government didn’t tax it all away. At 15 percent, a person earning $50,000 a year is taxed at $7,500. Multiply that by a 40-year working life, and you have $300,000; imagine if that were invested in a good mutual fund over that period.
Personal responsibility cannot be cultivated in a dependency climate.
What would you do with your FICA withholdings if they didn’t go to the Social Security Administration?