Recently, Republican Presidential Candidate Fred Thompson has become outspoken on the Social Security issue. In one of the rare cases where a politician musters up enough courage to discuss one of the premier dilemmas facing American society, Thompson seems to be on the right track. Instead of relying on increasing taxes in order to boost account values like Senator Clinton has suggested, Thompson began talk of privatizing Social Security and allowing individual Americans to save their money as they so chose via an investment vehicle (likely a 401(k) or something similar).
When asked his main thoughts behind the process, Thompson replied with a refreshing remark. "The American people are smart", said Thompson reflecting on U.S. citizen's abilities to invest themselves. How about that? A politician that has faith in the American people to choose and dictate their own prosperous future.
Contrast Thompson's pro-individual comments to those of Hilary Clinton's latest speech, in which she mandated, "When I am president, we'll have our priorities in order. We will return to fiscal responsibility and fair tax policies first, and then we will address the long-term challenges facing Social Security."
With an overwhelming lead in the Democratic Primary's early polls, I worry for the country with her pro-tax hike mentality, something a fragile economy wouldn't take kindly to. What happened to the pro-growth Democrats like Kennedy? Maybe Hilary should consult someone with experience in the position, someone who understood that tax hikes were detrimental to the economy. Say her husband, Bill.
Thursday, November 15, 2007
Privatized Social Security?
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1 comment:
Mike,
(None of the following comments are to be construed to be in support of Hillary Clinton). You have neglected to note two important aspects of the social security debate:
(1) Fred Thompson is in no way a trailblazer in proposing a privitized solution to social security. Our current mastermind president championed this idea years ago and it fizzled because of lack of support in the legislature and unpopularity with the American people. Thompson should not be praised for resurecting a dead idea that he borrowed from our current president.
(2)The idea of "social" security is that people in a prosperous country such as ours should not be relegated to poverty when they are willing to work. People who work should be able to retire in a state of relative comfort (not necessary luxury). A privitized social security system enables people of means to continue to grow their wealth in an uninhibited fashion, while people who scrape to get by get to "invest" a relatively small proportion of money in a risky market fund. It is a case of the rich get richer and poor stay poor.
I know you are about to say "but the poor can invest a percentage of money equal to their social security tax and it will grow to a vast retirement fund." But I will contend that investing a small amount of money over time will grow to a small amount of money in the future (relative to others who can afford to invest larger sums of money). As those who can invest large sums of money are able to grow their retirement portfolios, their wealth will continue to increase relative to those who cannot, and inflationary pressures will make sure to keep low the purchasing power of those retirement accounts. The gap between rich and poor continues to widen and privitized social security solves nothing.
Now, I will not argue that our current system of social security is the best way. It has many flaws and it will be in crisis before long. But, privitizing social security is not the answer, and it will be just another way for the gap between rich and poor to grow and to ensure that the quality of life for the poor in the richest country in the world are in line with those in the poorest countries in the world.
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