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Crafting A National Pension Plan

December 6th, 2006 | by Ken Grandlund |

(This is the second in a four part series on Social Security reform originally written in May of 2005. Part one was recently republished on Bring It On! here.)

Opponents of a national retirement program, commonly referred to simply as “Social Security,” tend to take the view that each person is responsible for their own costs of living and that a secure retirement is something to be enjoyed by those fortunate enough to have earned enough money throughout one’s lifetime to sustain themselves for 20 or more years without gainful employment. Such an attitude completely ignores the concept of gratitude and indebtedness we owe to our predecessors, assuming, incorrectly, that their own successes are completely independent of any other factors and are simply due to their own superior capabilities. According to these folks, each person is fully capable of planning for their retirement, and shouldn’t need to depend on government subsidies to enjoy their golden years. Indeed, their “why should I pay for you” comments show how little they appreciate the hard work that was put into their own upbringing and how little they understand the sacrifices made by preceding generations who created the progress this country has enjoyed.

You can believe what you want to, but I’m here to tell you that any success you may personally have is the result of many different people over many years and extends far beyond the powers of your own mind or capabilities. In order for society to function and progress, the combined efforts of all of its members are required, and as such, we all owe each other a debt of gratitude to some degree. Were it not for the care of our parents, we’d never make it into the world as responsible, productive adults. Were it not for our teachers, we would never learn the skills with which we support ourselves. Were it not for the desires or needs of individuals, we would not have jobs to support ourselves and would instead be a nation of subsistence farmers, scraping by just what we need to survive. We are all responsible to each other in this sense, and as such, we have a responsibility for each other too. One of those responsibilities is to assure that no one is left behind in poverty once their most productive years are behind them. As such, any national retirement program must have at its center this concept of shared responsibility, shared gratitude, and shared respect.

Like other tax-supported programs, the national retirement plan exists as a compact between the people and our government. The agreement has been that when you work, you deposit some of your wages into a social insurance fund. Your employer deposits a like amount as well. When you retire, you will receive a monthly stipend until you die. The government, who is entrusted to safeguarding the funds for their intended purpose, administers this fund. In theory, the number of workers paying into the fund at any one time would exceed the number of retirees withdrawing from the fund, keeping the fund solvent in perpetuity. But the theory has not held, and as a result, our national retirement program will be unable to hold up its end of the deal. The compact between citizens and government has been broken and the time has come to fix things up.

Although today’s retirees are receiving their promised returns, the rules for future retirees have been shifting over the years, raising the retirement age and preparing people for decreased returns. The reasons for this decline are fairly simple: there are more people retiring and drawing from the fund than there are to replace them, even in this age of dual income families, and wages haven’t kept pace to make up the difference. The other reason for the eventual collapse of the current system lies in the betrayal of government and their unwillingness to protect the funds for their intended purpose. Like so many other supposedly devoted taxes, our politicians have consistently raided the retirement funds over the years, replacing the actual money with worthless I.O.U.’s. Today’s workers have been told as much, the administration saying in effect that there will be no money for you when you retire. But go ahead and keep paying in anyway, because that’s how the system works.

Even without these major problems, the system itself fails to offer retirement security to all of our citizens equally, something that any tax based program should strive to do. The most glaring example would be for stay-at-home moms, who because of their absence in the business world have no earnings per se. But their indispensable tasks of rearing our young is worth its weight in gold and should be recognized as the valuable service that it is. Any national retirement program must be offered to all legal citizens equally.

Reform must occur in two separate phases. We must stabilize they existing system to the point that it will meet most, if not all, of its obligations to the citizens who are nearing or are in retirement now. Further, it must figure out a way to make amends to the workers who have and will continue to pay in, knowing full well that they will be getting the short end of the stick. But rather than try to patch a clearly breaking system, we need to let it phase out in favor of a more equal, and arguably more efficient national retirement program.

Retirement programs exist so that we don’t have to work until we die. But for most of our working years, we are either obsessed with saving enough money to retire on or are completely oblivious to what we will actually require once we do retire or how we plan to get it. In today’s business climate, private pensions (which are designed to supplement the national retirement program using your own dollars) are shaky for many, with companies going bankrupt and fleecing employees out of years of built up retirement funds. The relationship between employees and employers has also drastically changed, with the lifetime employee almost being unheard of. The result is any number of smaller 401k plans without the ability to achieve compound growth. It is painfully obvious to many that their best source of income in retirement is likely to be social security funds. This is the reality we live in, and so if we endeavor to continue to offer a national retirement plan, we must think of completely new ways of designing it.

While keeping the existing program on life support is important, first I’m going to propose a national retirement plan for future generations of workers. I think that even though we need to try to fulfill the promises to the people of today, it is also our duty to create a more lasting system than we have now. For any reform of the current system would naturally have to include plans for continuation of some sort, and I believe that our current system is too screwed up to rebuild. Sometimes you really do need to start fresh.

I had originally planned to present my plan for an entirely new retirement program for future generations of workers in this essay, but that will now have to wait until next time. I felt that I needed to defend the concept of a national retirement plan once more before I could go on to explain my ideas. For it is essential to understand that a national retirement program is more than just a reshuffling of tax dollars from one person to another. The essence of our working life is the ability to some day kick our feet up and retire. This is one of the promises of America. This is a part of the American dream. It is something the we, as a society, have affirmed over the last 70 years through our continued support of a system that once was good, but now is sinking.

[tag]social+security+reform[/tag]

  1. 17 Responses to “Crafting A National Pension Plan”

  2. By SteveIL on Dec 6, 2006 | Reply

    I will make a rational objection to this whole idea, because there are a lot of things missing. 

    First off, Soc. Sec. and pension funds were set up when people didn’t live nearly as long as they do now.  Therefore, people in general just didn’t live as long after retirement.

    Second, Americans almost never relied on the government after retirement but on their own families.  It was not unusual for many generations of a family to be in the same house, and it would be the family that cared for the elders.  This doesn’t happen nearly as much anymore due to the fact that as humans, as a whole, get older, they require greater medical needs than can be provided at home.  Of course, part of the problem is the reliance on another government program, Medicare, to cover these expenses.  I would also add that health insurance companies seemed to have not addressed the idea of providing coverage for extended family members, not just immediate family members.  I do not know if this has to do with regulation of the insurance industry or if they just hadn’t thought about it.  Add, of course, government over-regulation of the health care industry and one can see where all this has led.

    Part of the problem has been the continued reliance on government for so much.  Many of today’s most influential people, and many of these are wealthy beyond belief, laud the idea, especially since they won’t be affected by it.  Rich “liberals” like Oprah Winfrey, Ted Turner, George Soros, much of Hollywood, most politicians of all parties, already have the means to take care of their entire families without the reliance of the government, and have enough accountants to find the loopholes in the tax system.  (Obviously this is true with wealthy conservatives as well, they just don’t believe in this kind of government interference.)  This reliance on the government will only make things worse for the middle and lower classes.  Government should never take on the role of private businesses as it serves at cross-purposes.  The job of business is to make a profit, while the job of governmennt is to make and enforce laws, including those regulations that make sure business can make profits without screwing over their employees.  Private business may have influence over government officials, but that doesn’t mean they set the rules (laws).  Once government becomes a business, it must get into the mode of making profits.  And government has the ability to set the rules to ensure this happens, including making sure the politicians who set these rules benefit first and foremost, and always at the expense of those they govern.  There’s never been a politician who hasn’t been sucked into this expansion of power.  We see it already in the big government politics that have intruded into the lives of everday Americans as the politicians seek new ways to make sure it becomes harder to get rid of them.

    I believe a return to the traditional reliance of family will fix this, not more government.  Government can set it up so that private industry can help everyday people achieve this in a cost-effective, truly compassionate manner.  And this could be done by not relying on the government to manage it, as they have shown they can’t handle it, and never could.

  3. By Jersey McJones on Dec 6, 2006 | Reply

    Familes, as Marx warned us, have been destroyed by laizzez faire capitalism.  There is no one to take care of us (most of us) when we get old and tired.

    As the future marches on, we live longer and longer, but the age and tireness only compounds.

    We still have value, as we get older, but the monetary assessment of that value, in a laizzez faire economy, is negatively disproportionate to it’s actual worth.

    Assuming that the private sector will step up to our needs, in a laizzez faire economy, is FUCKIN’ STUPID.

    Grow up America - or you will really hate growing old.

    JMJ

  4. By SteveIL on Dec 6, 2006 | Reply

    You are a Marxist, ain’t you Jersey?  I’m sorry, but Marx is dead.  Engels is dead.  Lenin is dead.  Stalin is dead.  The Soviet Union is dead.  And Castro will soon be doing the world a favor by soon becoming worm food as well.

    Marxism is a failure.  Even the Communists of the world don’t even believe in it anymore, except for those “leaders” (Castro, Kim Jong Il) robbing their own peoples’ livelihood for their own personal bank accounts.

  5. By SteveIL on Dec 6, 2006 | Reply

    One other thing, Jersey.  It was the Marxist-Leninists who encouraged children to tell the Communist government when their parents were speaking “subversively” (with wide range of meaning).  I think this shows that Marxism destroys families, not capitalism.

    Marx was a liar. 

  6. By Jersey McJones on Dec 7, 2006 | Reply

    SteveIL, you simpleton, a lot of things  Marx said were true.  A lot of his predictions have come to be.  I’m not  a Marxist, simpleton.  I’m just not stupid enough to think that Marxism, as per Marx, was ever practiced by any nation.  And I’m not stupid enough to think that every single thing a person says should be  negated because I disagree with some of it.  God, what an awful, simpleminded, comic-book universe you must live in.  I feel sorry for you.

    JMJ

  7. By SteveIL on Dec 7, 2006 | Reply

    Jersey said:

    SteveIL, you simpleton, a lot of things  Marx said were true.

    Name one.  You know what lessoned can be learned from Marx?  That what he advocated was wrong, lethally wrong.  His work should be studied to teach that what he wrote advocated death and failure.

    And what about laizzez faire capitalism?  It isn’t practiced anywhere, simpleton.  What we have in the US is too much regulation in some cases (health care, the insurance industry as a whole, corporate welfare), and not enough regulation in others (too many mergers of businesses in the same indusry, the awarding of rampant outsourcing, the rampant hiring of illegal aliens).  This is not the fault of capitalism or business, but the misguided priorities of government at all levels.  It is their job to make and enforce the laws that create an equitable environment for its citizens who are the business owners and their workers.  When government gets too directly involved in the affairs of either, or even both at the same time, problems occur.

    Therefore, your statement:

    Familes, as Marx warned us, have been destroyed by laizzez faire capitalism.

    is a lie because laizzez faire capitalism hasn’t and doesn’t occur, simpleton.  Completely free markets have never existed, and will never exist on any kind of large scale.  Governments have in the past and will always have their hands in the pot.  Marx was promoting a lie in order to sell books, on par with a snake-oil salesman.  And the above statement is a lie because Marxism did more to destroy families than capitalism ever did.

    By the way, when confronted with being a Marxist, a Marxist will deny he/she is one, then promote Marxist doctrine.

  8. By Paul Watson The Cranky Brit on Dec 7, 2006 | Reply

    SteveIL,

    Marxism has never been practiced either, given that it posits no government intrusion into the lives of the workers. Thus it is as innocent as you say laissez faire capitalism is for the same reason.

  9. By SteveIL on Dec 7, 2006 | Reply

    The difference, Paul, is that even the attempt at moving to the various forms of Marxism was brutally imposed by the governments who tried to implement the parts they did.  And Marx himself advocated the use of violent revolution to advance an economic theory.  That’s never happened in a capitalist society; the American Revolution itself was economic in nature (among other things), but that was because the British government was overtaxing and screwing over the colonies and not providing services (whatever those would be) in return.

    About the closest point this country ever came to laizzez faire capitalism was in the South when slavery was legal.  The government allowed for the exploitation and ownership of human beings by other human beings who were too cheap (and too racist) in order to maintain their own personal wealth.  And while the vast majority of Southerners of the time weren’t slaveowners, they bought into the lie that it was OK for slavery to exist, and that the government had no business interfering.

  10. By Jersey McJones on Dec 7, 2006 | Reply

    SteveIL, you just contradicted yourself, as Paul pointed out.  Stop parsing.

    Modern as-capitalist-as-can-be societies are seeing marraige, children - FAMILY - disappearing.  Marx saw this coming.

    JMJ

  11. By SteveIL on Dec 7, 2006 | Reply

    Well, it’s been awhile since I read my Marx (considering I have no respect for what he says).  I do recall requiring a violent revolution for overthrowing a government in order to establish his economic system in its place.  I don’t recall that he ever said there wouldn’t be government intrusion under his system (not that he didn’t; I just don’t remember).  If he actually thought that would occur, then he was an idiot also, because that will never happen.  At least not while the human species is configured the way it is now.  Therefore, I am correct when I say that what he says about family is a lie.

  12. By Paul Watson The Cranky Brit on Dec 7, 2006 | Reply

    Why are you correct? I see no evidence in that last post to prove anything other than that you don’t remember your Marx, and are probably therefore not the best person to talk to about what he said, so why do you think you’ve somehow proved your point?
    All you say is that Marx was an idiot and therefore you’re right. Under that logic, if it can be called that, because George Bush is an idiot, I’m right in saying the Iraq War was a mistake. Clearly you’d disagree, but this time your argument doesn’t rise above that level.

     

  13. By jomama on Dec 7, 2006 | Reply

    No matter how it’s “reformed” there will be more or different guns in the room as long as there is a government.

    Will you understand all that? Second, will you care?

    If you don’t, expect more of those guns.

  14. By SteveIL on Dec 7, 2006 | Reply

    Paul,

    Let’s review what was said.  Jersey stated:

    Familes, as Marx warned us, have been destroyed by laizzez faire capitalism.

    I said that laizzez faire capitalism has never existed in its pure form.  You say Marxism never existed in its pure form.  What it also would say is that since laizzez faire capitalism never existed, how could it be destroying families?  Therefore, Marx warning us about the destruction of the family by an economic system that didn’t exist is a lie.  You say Bush lied when he warned us that Saddam had WMDs.  That means he knew there weren’t WMDs there but said otherwise.  That thinking would apply to Marx as he would have known laizzez faire capitalism didn’t exist (the guy did wrote about economics and philosophy).  His warning about it would then be a lie.

  15. By SteveIL on Dec 7, 2006 | Reply

    You know, the more I think about this statement:

    Familes, as Marx warned us, have been destroyed by laizzez faire capitalism.

    the more ridiculous it sounds.  For the entirety of human existence, the vast majority of people have always lived under the whims of a lord or king or whatever despot, and in much worse economic conditions (and every other condition) than exist today.  Yet, families survived.  Otherwise none of us would be here today.  Economic systems don’t destroy families.  They can’t.

    Gotta go finish cooking.

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  2. Dec 10, 2006: Bring it On! » Blog Archive » The National Whole Life Pension Plan
  3. Dec 13, 2006: Bring it On! » Blog Archive » Salvaging Social Security’s Retirement Benefits
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