The American Spectator

Reader Mail

(Page 4 of 12)

: /p> p>Obama is learning a lesson from the Socialists in Chile -- if you lie long enough and well enough you can raise taxes, stymie an economy and undermine freedom of choice and still market yourself as an "idealist" (actually ideologue) working for positive change. br> -- Michael Tomlinson br> Jacksonville, North Carolina /p>

The reason that Social Security has no savings or investment is that it was never set up to be a pension fund, but was meant to be a retirement insurance program which would pay out a small percentage of claims against a huge pool of insured. This was based on the assumption that most Americans would not live to file claims, as the average life expectancy during the 1930s was less than the 65-years of retirement age. As long as most people didn't file claims, the fund would, theoretically, remain solvent.

That assumption, however, ran up against several trends. First, the Johnson administration saw the opportunity to use the SSI revenues to fill in budget shortfalls. Had a private insurer exhausted the company's assets to cover overspending, the FCC would have had his head on a plate, but since it was the FCC's boss that was doing it, the rules governing oversight of insurance funds were never applied.

The second trend was the idea that people who had never paid into the program could be eligible for benefits. This started with minor dependents or spouses of deceased recipients, which seemed like a logical outgrowth (if you accept that the payments into Social Security were part of the estates of the claimants), but soon this logic was applied to people who had no relation to the program, from recent immigrants to disabled adults. What had started out as an insurance program soon became just another form of welfare.

Finally, people began living longer. That meant that, rather than a small percentage of insured members filing claims, the vast majority filed them, draining the system's assets. Even if the system hadn't been looted, it would have been impossible to maintain the benefit structure without a constant influx of new taxpaying workers to support the retirees, a problem which will reach critical mass as the baby boomers retire. Again, a private company which paid out dividends to the first wave of investors out of the payments of the last wave, without any real investment, would have been shut down as a Ponzi scheme.

p>The solution to Social Security must begin with the recognition that it was structurally unsound from the beginning, and that the temptation to loot any source of revenue is too great for any government. Those who claim that it cannot be amended because it would somehow violate FDR's "legacy" have elevated symbolism over substance, and will end up saddling FDR with a far more destructive legacy, the bankruptcy of the United States government. br> -- Mike Harris br> MAJ, US Army

topics:
Taxes, John McCain, Barack Obama, Bill Clinton, Entitlements, Social Security, Sports, Islam, Constitution, Supreme Court, Founding Fathers, Military, NATO, Energy, Oil