The Sacramento Bee wire opinion article about Social Security, published April 2, has some interesting points, but I would like to look at Social Security from another perspective.
Social Security was enacted during the 1930s under the Roosevelt administration. Although Social Security was intended to provide people relief during periods of unemployment and to retired workers, it has become one of the most expensive government entitlement programs. President Roosevelt didn’t understand the unintended consequences that are presented today.
The article mentions that the Bush administration would like to privatize Social Security accounts. It would not matter whether Social Security is privatized or not. The issue is productivity and not money. The problem is that there are more people collecting it than paying into it.
Even if there were $100 trillion in the Social Security trust, it would still not be enough to finance everyone over their working careers. Since people are also living longer, it is harder for younger workers to support the many more people retiring. Eventually the $100 trillion would run out. One solution politicians have come up with is to try to reduce the benefits of people making more than a certain income. As we know, the problem is productivity and not money.
A solution to the Social Security problem would be to phase it out over many years. Some of you might be saying, “It’s wrong to take money from people who have earned it.” This is true, but I could say the same thing about the government. Next time you look at your paycheck, look to see how much is taken out for FICA, the Social Security tax.
As of last year, an employer withholds 6.2 percent of an employee’s earnings. The employer is a placeholder for the tax which is ultimately given to the government. However, what right does the government have to take the money from hard-working citizens and decide how to use it? If the government is taking my money and telling me how to use it, it would constitute tyranny. The government should let people decide how to save or spend their money.
People are far more able to spend their money better than any bureaucrat in government. If Social Security were abolished, it would save hard working Americans billions of dollars in taxes per year. Everyone would be better off under this system. People would be paying less in taxes and retirees could decide what to do with their income.
This increase in savings could be used to buy more items or just simply save more money. If individuals would like to support retired workers, let them. Social Security is more of a pyramid scheme, promising people that they will receive the money they spend from a second generation whose money will be provided by a third generation and continuing on. People need to become more self reliant, as Ralph Waldo Emerson put it more than a century ago.
Peter Parlapiano is a junior finance major from Houston.