Libertarian candidate for President Bob Barr released a position paper on Social Security the other day that, frankly, is very disappointing. His proposal is a half-measure that fails to allow most people to opt out and suffers from a terrible case of doublethink. We need to end Social Security – in our lifetime – without leaving either senior citizens or working taxpayers in the lurch.
Social Security is a Ponzi Scheme
Wouldn’t it make a lot more sense for everybody to just hold on to their own money?
Barr admits that Social Security is unsustainable, that it is a Ponzi scheme and, if left unchecked, would soon eat up the entire federal budget. He rightly points out that we earn far less of a return on our Social Security tax payments than we would investing the funds, that we don’t retain ownership of the funds and therefore have no opportunity to pass anything along to our descendants and that returns are arbitrary, with whites, married couples and women living longer and therefore getting more. In fact, Barr points out that returns are negative in some cases.
In practice, the system is “pay-as-you-go,” which, if it was a private system, would be characterized as a Ponzi scheme; that is, a variant of Charles Ponzi’s famous swindle in 1920 in which he promised fantastic rates of return and paid off early investors with the contributions of later investors. The scam collapsed within a year because Mr. Ponzi lacked the federal government’s power to tax ever more and to force more and more workers into the program.
We Need the Freedom to Opt Out
But, in a classic case of doublethink, he proposes to put Social Security on a “responsible financial footing” by forcing everyone under 55 to open “private retirement accounts” and diverting just a portion of their 12.4% social security taxes to the private account. Those who have paid in social security taxes for 5 or more years can never opt out of social security, under Barr’s proposal.
Those just entering the workforce or who had been in the workforce no more than four years could begin by contributing half of their Social Security payments, 6.2 percent, and increase their contribution by one percent a year, topping out at 10.2 percent. After four years they would graduate from the system, and would be entitled to no benefits under Social Security. Those already in the workforce five or more years could start at 4.2 percent and increase their contribution a half percent a year. They could top off at 8.2 percent, after which they would accrue no more Social Security benefits.
Why Must We be Forced to Participate in a “Private” System?
Barr never considers why individuals need to be forced to participate in his retirement savings system.
This proposal is worthy of a Republicrat, but not a Libertarian. Barr never considers why individuals need to be forced to participate in his retirement savings system. He has no qualms about damning most everyone in the workforce today to a lifetime of payroll taxes. He has no concern for the self-employed, who must pay the full 15.3% in FICA taxes out of their own pocket.
No More Borrowing!
He rightly advocates cutting spending in other areas in order to finance a transition period for social security, but he also advocates borrowing if need be. This is disgusting. Not including entitlement shortfalls, we are more than $10 trillion dollars in debt. We can not permit any further borrowing.
LP’s 2004 Candidate Much Better
Barr’s proposal is considerably less libertarian than 2004 Libertarian Party candidate for President Michael Badnarik who said:
I would eliminate the existing Social Security system and allow workers to manage their own retirement accounts. Benefits for workers already retired should be maintained.
Even the LP Platform is Right
You do not have a right to the fruits of my labor!
The Libertarian Party platform is surprisingly eloquent on this topic, stating:
Retirement planning is the responsibility of the individual, not the government. We favor replacing the current government-sponsored Social Security system with a private voluntary system. The proper source of help for the poor is the voluntary efforts of private groups and individuals. (emphasis added)
Barr’s Proposal = Bush and McCain’s Proposals
And Barr’s proposal is rather similar to George W Bush’s proposal when he was running for President eight years ago, and John McCain’s position this year. Since when does the LP mimic an outdated Republicrat policy?
John McCain will fight to save the future of Social Security, and he believes that we may meet our obligations to the retirees of today and the future without raising taxes. John McCain supports supplementing the current Social Security system with personal accounts – but not as a substitute for addressing benefit promises that cannot be kept.
Obama: Social Security Best Program Evar. ROFL.
Of course, Barr is considerably better than Barack Obama on Social Security, who calls it “the most important and most successful programs that our country has ever made” [PDF].
I Thought Socialism Failed?!
Retirement planning is the responsibility of the individual, not the government.
Social Security is a Ponzi scheme that will bankrupt our nation if we don’t act now. It is the epitome of the socialism that we like to say has failed. So why are we incapable of defeating it and with as much drive and gusto as we supposedly defeated socialism twenty years ago?
Social Security is Morally Wrong
Social Security is borne of the welfare state mindset that says Americans are unable to determine what’s best for themselves and act on it. Supporters of Social Security think they have the right to dispose of our money – our time, our lives – as they see fit. Social Security is morally wrong because it tramples each citizen’s right to do what they please with the fruits of their labor, as long as they don’t violate others’ rights. And, no, you do not have a right to the fruits of my labor!
A Solution. NOT a ‘Fix’.
We need a real solution to this problem, not a “fix” that delays full onset of bankruptcy for just another twenty years, abdicating our responsibility to our children. If Social Security’s purpose is to increase savings available for retirement, it is a failure. On the whole it loses money because its rate of return is less than what the market would pay. If its purpose is to rescue senior citizens from poverty, is also a failure. The benefits it pays out are pathetically small – and can only decrease from here on out.
The Solution is Abolition and an Affordable Transition
The Republicrats have nothing to lose by dawdling on Social Security. All they have to do is claim they’re protecting it and they get re-elected for another four years. But the Libertarian Party, which admits that Social Security is an unworkable fraud, has everything to gain by alerting voters to the problem and offering a real solution: abolition of Social Security with an affordable transition that doesn’t leave the old – or anyone else – in the lurch.
Social Security is so Stupid
Social Security is such a stupid idea. You pay your money in and then have to defend it via the political process where a majority can vote you out of your money any time it wishes. Why would anyone wish to put their money in that kind of jeopardy?
Wouldn’t it make a lot more sense for everybody to just hold on to their own money? At least that way you know what you’re getting and don’t have to waste time running around with “Hands off my Social Security” signs.