Government

Liberal democratic values; where do they actually take us?

We hear a lot these days about liberal democratic values. Not sure what that means, but the impression is more government programs without focus or limit and not paid for or paid for by a small minority of Americans; the former more often the case.

477F48DA-EA23-4021-A237-94F0C442C77FFDR had the right idea with Social Security. It was supposed to be self-sustaining; paid for by workers and employers so it was not seen as government welfare and politicians would be less inclined to mess with it. That didn’t last too long.

Listen to the rhetoric today from the American left; many would turn Social Security into a welfare program. A few on the left have the audacity to tell us the program is running a surplus even as it heads toward the inability to pay full benefits.

At the same time what was supposed to be a safety net, a supplement to retirement income is relied upon as the sole or majority of income for most seniors. Over more than half a century things have gotten worse not better in terms of assistance versus individual responsibility.

For 61 percent of elderly beneficiaries, Social Security provides the majority of their cash income. For 33 percent of them, it provides 90 percent or more of their income.

Reliance on Social Security increases with age, as older people — especially older women — outlive their spouses and savings. Among those aged 80 or older, Social Security provides the majority of income for 72 percent of beneficiaries and nearly all of the income for 42 percent of beneficiaries.

One thing is clear though, without Social Security many people would be much worse off, but that’s no excuse for irresponsible behavior since 1935.

What happened? Well, politicians did get involved and individuals came to believe that Social Security was their retirement income causing too many Americans to ignore planning for their and a survivors retirement income.

If we had merely followed FDRs vision and kept the funding equal to promised benefits and changing demographics, we would be fine or at least solvent. If Americans had done their job over a forty plus working life most would be fine as well, we didn’t and they didn’t. Now what?

The answer is quite simple. To be consistent with FDRs vision all we need to do is increase the payroll tax from 6.20% on worker and employer to 7.58%. That will keep the program solvent for another generation (75 years). Simple right? Except that it is blatantly unfair to current worker who would carry the burden of inaction and irresponsible behavior of dozens of past Congresses.

If Congress had heeded the Trustees back in 2011 the increase required would have been 2.15% not 2.76%; Congress did nothing. If Congress had acted in 2006 the increase would have only been 2.02% that amounts to about $8.49 per week for the average US worker today, an amount that would largely go unnoticed after a payday or two.

But none of that happened and we are in a battle between left and right; increase benefits and tax the higher income more; increase the COLA (hey, what about fixing what we already have?) vs trim future benefits.

Promises, promises … that nobody tells the truth about or wants to pay for while most Americans go naively along listening to the fairytales they are told and leaving their future to chance and politics. 👎

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3 replies »

  1. Seriously Dwayne? Always someone else’s responsibility. It’s the governments fault; it’s the businesses fault. Living for today, worry about tomorrow later and then protest because life essentials aren’t free! Make your own coffee before you go to work. Bring a homemade lunch. Fix dinner at home. Save some money for tomorrow. It is hard but it works.

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    • Seriously – yes. It’s always someone else fault. Just ask them, not me because I saved my money and retired at 55. I took responsibility for my family. I worked hard. I saved and invested my money. I could not be bought by policial false promises. I can think for myself. I do my own research and I do not trust any information on social media.

      So which part do you find unbelievable? US pension plans are unsustainable. Businesses are moving overseas for cheaper labor. Politicians buy votes by expanding social programs into welfare programs? That fact that 61% of the elderly depend on social security for a majority of their retirement income?

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  2. I think some businesses also believe that social security is a retirement plan so why should they offer pension plans? Businesses need to compete with other countries whose companies don’t offer plans.

    Yes, I know that American pension plans were unsustainable and there are many reasons why they are gone, but many businesses used the excuse that social security was there thus reinforcing the false belief put forth by the politicians buying votes which in turns fuel the politicians on insisting on increasing benefits because people are now depended on social security welfare.

    The cycle will only be broken when the system totally fails and the people who need social security the most will be the ones suffering the most.

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