PRIVATIZE SOCIAL SECURITY - a personal perspective. I have posted a number of times - here, here, and here - to plead the case for privatization. Recently, Alan Sloan wrote in the Washington Post [”Let’s talk turkey about privatizing Social Security”] to deride the idea. Jagadeesh Gokhale, a senior fellow at the Cato Institute returned fire ["Distorting Social Security privatization proposals"].

Gokhale is correct; Sloan is wrong. Here’s a personal example.

I just retired at age 66 and began collecting Social Security last month. I worked 38 [FICA] years, paying into the Social Security system a total of $122,472.12. My employer(s) contributed an equal amount, for a total of $244,944.24. During those 38 years of FICA employment, I paid the FICA maximum for 21; therefore my monthly benefit of $2330 is near the Social Security maximum payout of $2346/month.

Now let’s suppose that all those FICA withholdings were invested in the stock market in a 401K-like account. I did just that, on paper, investing each years withholding in the stocks making up the Dow Jones Industrial Average (DJIA), and each year “growing” the account balance by the growth - or decline - of the average for that year. As of October 29, 2010, my retirement date, my paper Social Security account had accumulated a total of $805,307.80.

Now for the comparison. My social security income is roughly equivalent to a 50% joint life growth annuity, since payments are indexed to inflation and end when both my wife and I finally die. So I found an annuity calculator online, and asked it what an $800,000.00, 50% joint life annuity would pay out. The answer: $4,417/month (level) or $3,301/month (with an annual 3% growth factor built in).

Since Social Security has an annual cost-of-living adjustment (COLA) component, the 3% annuity is the better comparison. Guess what? $3,301/month is 42% more than $2,330/month.

At 66, I can expect to live another 16.28 years (the standard mortality tables are here). So, I can reasonably expect a lifetime return of $455,188.80 - roughly double what my employer and I jointly contributed. That means that you, the taxpayer, are on the hook for about $210,244.56 over the next 16.28 years (remember, I’m retired; I no longer pay FICA taxes since I no longer have FICA income). But if Social Security had been privatized in 1972, you wouldn’t be on the hook for a dime - or a nickel, or a penny - and I would be better off.

Now let’s look at a few other things.

In his Washington Post article, Alan Sloan argued:

Privatization is risky, subject to “market vagaries,” and the potential retiree could be forced to retire just when the stock market bottoms out. He’s right - and I had to. The stock market collapsed in 2008, suffering a 35% drop from which it still hasn’t recovered. And the data above reflects that loss! Even with that 35% drop in 2008, I would still be better off with the privatized system than I am with today’s Social Security.

Social Security is safe. Uh, not really. It’s subject to the whims of the 535 pandering dilettantes, laughingly called Congress, who are rapidly running out of other peoples’ money to spend: the Social Security Board of Trustees report that by 2037, the Social Security Trust Fund will be exhausted and able to pay out only 78% of current benefits - which ain’t all that great to begin with.

“Most people have no idea how to invest well.” To which I respond “Nuts.” My investment philosophy (invest moderately; diversify; leave it the hell alone) certainly isn’t terribly sophisticated, yet it has worked pretty well. I've been tracking my 401K investments over the last 10 years or so, comparing my investments against the growth of both the DJIA and the NASDAQ market indices. My "diversify/leave alone" strategy consistently outperforms both indices. The “no idea how to invest” trope may have some validity in the short term, but it’s not an argument for a long (40-year) investment horizon.

Former President Bush, in calling for privatization, argued that Social Security provided only about a 2% return on FICA dollars “invested.” Actually, it’s a bit of a stretch to use the term “invested” since most FICA funds are transferred directly from you to current retirees (e.g., me) and only the excess “invested” (at around 2%) in Treasury bills - which are then paid with future taxes.

Privatized Social Security is truly invested - and the long-term real growth has been relatively stable at about 3% above inflation. In my particular case, since 1972, when I first started paying FICA taxes, through last month, when I retired, the DJIA grew at an 8.11% annual rate; inflation, as measured by the Consumer Price Index (CPI), grew at an annual rate of 4.45%. Real growth (growth less inflation) averaged 3.66% over the 38-year period.

So ... privatization works. Of that, there is no doubt. It's too late for current retirees (me) to benefit, obviously, and close to too late for our children. But there is time to prevent our grandchildren from becoming poverty-stricken wards of the State.

[Update] Instapundit linked - thanks, Glenn. For those of you who followed Glenn's link, please look around; my home page is here. And please use the comments to let me know what you think of social security privatization.

SOCIAL SECURITY REVISITED

In January Allan Sloan, senior editor at large of Fortune magazine wrote about privatization of Social Security:

If your year-end 401(k) statement made you feel like barfing, I have one consolation for you: it could be worse. How's that possible, given how horrible last year was for investors? Simple: If you're not close to retirement, you've got time to recover.

If, however, you were forced to buy a lifetime annuity with your current balance - when you buy such an annuity, you trade your cash for a series of guaranteed payments for the rest of your life - you'd be making your loss permanent.

Sloan argues that’s bad, because

Social Security benefits, of course, are set by a formula that isn't affected by markets moving up, down or sideways.

Those quotes interest me, since I first wrote about privatizing Social Security here. In that post I used my own FICA tax history to show that I would have gotten a much better return on the FICA withholdings if they had simply invested in the stocks comprising the Dow Jones Industrial Average (DJIA) and the accumulation annuitized on retirement.

In a later post, I looked at John and James Doe, identical twins with the same minimum wage history, one invested in the DJIA and the other invested in Social Security over a 50 year period. On retirement, James, who had invested in the stock market, had a retirement income 31% greater than that of his brother.

Both of Sloan’s statements above are true, of course, but they are beside the point. The real question is this: Even if the market goes south – way south – just before retirement, are you still better off than you would be under Social Security?

The question isn’t academic to me; I’m in exactly that position. So I reopened my original investigation using today’s market drop to see what happens. Here’s the methodology.

I first calculated my Social Security income starting in January 2011, the year following my 66th birthday. I used the detailed ANYPIA calculator available from the Social Security website with my FICA contribution history. It’s accurate to within a few pennies.

I then calculated what the growth of my FICA contributions would have been had they been invested in DJIA stocks in the year the FICA contribution was made, dating from the first contribution in 1962 through the 32% market drop in 2008.

For 2009 and 2010 I used FICA contributions based on current salary, and assumed that in 2009 the market will drop an additional 16% and recover in 2010 to grow at a modest 6%.

These assumptions are roughly equivalent to market conditions during the recession of 1973-74.

I then converted the accumulated growth to a joint life with 10-year minimum payout annuity to get the equivalent Social Security payout. An annuity calculator is available here.

The results? If only the employee half of the FICA contributions had been invested in the stock market, in 2011 I would take home 20.6% more than my predicted Social Security income. If both employee and employer contributions were invested, my take-home in 2011 would be a whopping 41.2% more than Social Security.

But, you say, Social Security benefits will always be there. Sorry, not so. Social Security is already in trouble; it’s running out of money and the demographics are wrong for a tax-increase solution. I’ll probably be okay, but my children and grandchildren will not.

The truth is that the stock market will always be there; Social Security may not.

A HISTORY LESSON about your Social Security: just in case some of you young whippersnappers (and some older ones) didn't know this.

Social Security cards up until the 1980s expressly stated the number and card were not to be used for identification purposes. Since nearly everyone in the United States now has a number, it became convenient to use it anyway and the message 'NOT FOR IDENTIFICATION' written on the card was removed.

I still have my old Social Security card with the "NOT FOR IDENTIFICATION" message written on the face of the card.

Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program. He promised:

1) That participation in the Program would be completely voluntary.

Not any more.

2) That the participants would only have to pay 1% of the first $1,400 of their annual incomes into the Program.

It's now 6.2% [excluding Medicare] on the first $113,700 of income, with your employer contributing an equal amount.

3) That the money the participants elected to put into the Program would be deductible from their income for tax purposes each year.

Not any more.

4) That the money the participants put in went to the Independent 'Trust Fund' rather than into the General Operating Fund, and therefore, would only be used to fund the Social Security Retirement Program, and no other Government program.

Under President Lyndon Johnson the money was moved to the General Fund and spent.

5) That the annuity payments to the retirees would never be taxed as income.

Under Clinton & Gore up to 85% of your Social Security can be taxed. If you have any income beyond Social Security, it probably being at least partially taxed.

Some Frequently [Un]asked Questions:

Q: Which political party took Social Security from the Independent 'Trust Fund' and put it into the General Fund so that Congress could spend it?

A: It was Lyndon Johnson and the Democratically controlled House and Senate.

Q: Which political party eliminated the income tax deduction for Social Security (FICA) withholding?

A: The Democratic Party.

Q: Which political party started taxing Social Security annuities?

A: The Democratic Party with Al Gore casting the 'tie-breaking' deciding vote as President of the Senate, while he was Vice President of the U.S.

Q: Which political party decided to start giving annuity payments to immigrants?

A: Jimmy Carter and the Democratic Party. Even if they never paid FICA (Social Security) taxes.

Now the Democrats turn around and tell you that the Republicans want to take your Social Security away. And the worst part about it is that uninformed citizens believe it.

From my email.

FROM MY EMAIL: Who died before they collected Social Security?

Here's an anti-Social Security email making the rounds that's a first (to my knowledge) that gets two essential elements right: (1) Social Security is essentially a Ponzi scheme; and (2) privatization is the better deal. Here's the email.

The only thing wrong with the Government's calculation of available social security is they forgot to figure in the people who died before they ever collected a social security check.

Where did that money go?

Remember, not only did you and I contribute to Social Security but your employer did, too. It totaled 15% of your income before taxes. If you averaged only $30K over your working life, that's close to $220,500.

Read that again.

Did you see where the Government paid in one single penny? We are talking about the money you and your employer put in a Government bank to insure you and me that we would have a retirement check from the money we put in, not the Government. Now they are calling the money we put in an entitlement when we reach the age to take it back.

If you calculate the future invested value of $4,500 per year (yours & your employer's contribution) at a simple 5% interest (less than what the Government pays on the money that it borrows). After 49 years of working you'd have $892,919.98. If you took out only 3% per year, you'd receive $26,787.60 per year and it would last better than 30 years (until you're 95 if you retire at age 65) and that's with no interest paid on that final amount on deposit. If you bought an annuity and it paid 4% per year, you'd have a lifetime income of $2,976.40 per month.

The folks in Washington have pulled off a bigger Ponzi scheme than Bernie Madoff ever did.

Entitlement my foot; I paid cash for my social security insurance! Just because they borrowed the money for other government spending, doesn't make my benefits some kind of charity or handout!

Remember the benefits for members of Congress?
+ free healthcare,
+ outrageous retirement packages,
+ 67 paid holidays,
+ three weeks paid vacation,
+ unlimited paid sick days.

Now that's welfare, and they have the nerve to call my social security retirement payments entitlements?

They call Social Security and Medicare an entitlement even though most of us have been paying for it all our working lives, and now, when it's time for us to collect, the government is running out of money. Why did the government borrow from it in the first place? It was supposed to be in a locked box, not part of the general fund.

Again: where is the money that those who died before they reached retirement (and their employers share) put in?

Sad isn't it?

The author does have several errors of understanding the Social Security system, the first of which is the "What happened to those who died?" question, which is accounted for through the withholding rate. The larger error is the "it's my money" assumption, which is why Social Security can be fairly described as a Ponzi scheme. The money you (and your employer) pay into the system is not saved for your benefit; it's used to pay benefits to those who have already retired. Think of it this way: you pay for your parents, your children pay for you, their children pay for them, and so on.

Only to the extent that receipts outweigh the outlays is there any savings, and those savings, invested in U.S. Treasury bonds and repaid with taxpayer funds, are not held for any individual benefit.

Congressional 'benefits' are irrelevant to Social Security; they are only another indicator of how government is for the governors, not the governed.

The paragraph on investing (italicized above) is accurate and succinctly gives the rationale for privatizing. For a much more detailed explanation of privatization, here's an old post of mine.

FROM MY EMAIL:

Dick Durbin, the senior Senator from Illinois called senior citizens the Greediest Generation as he compared Social Security to a milk cow with 310 million teats. Here's a response in a letter from one of his constituents ... she is a little ticked off! She also tells it like it is!

Hey Dick, let's get a few things straight!

1. As a career politician, you have been on the public dole (tit) for FORTY YEARS.

2. I have been paying Social Security taxes for 48 YEARS (since I was 15 years old. I am now 63).

3. My Social Security payments, and those of millions of other Americans, were safely tucked away in an interest bearing account for decades until you political pukes decided to raid the account and give OUR money to a bunch of zero losers in return for votes, thus bankrupting the system and turning Social Security into a Ponzi scheme that would make Bernie Madoff proud.

4. Recently, just like Lucy & Charlie Brown, you and "your ilk" pulled the proverbial football away from millions of American seniors nearing retirement and moved the goalposts for full retirement from age 65 to age, 67. NOW, you and your "shill commission" are proposing to move the goalposts YET AGAIN.

5. I, and millions of other Americans, have been paying into Medicare from Day One, and now "you morons" propose to change the rules of the game. Why? Because "you idiots" mismanaged other parts of the economy to such an extent that you need to steal our money from Medicare to pay the bills.

6. I, and millions of other Americans, have been paying income taxes our entire lives, and now you propose to increase our taxes yet again. Why? Because you "incompetent bastards" spent our money so profligately that you just kept on spending even after you ran out of money. Now, you come to the American taxpayers and say you need more to pay off YOUR debt.

To add insult to injury, you label us "greedy" for calling "bullshit" to your incompetence.

Well, Captain Bullshit, I have a few questions for YOU:

1. How much money have you earned from the American taxpayers during your pathetic 40+ year political career?

2. At what age will you retire from your pathetic political career, and how much will you receive in annual retirement benefits from the American taxpayers?

3. How much do you pay for YOUR government provided health insurance?

4. What cuts in YOUR retirement and healthcare benefits are you proposing in your disgusting deficit reduction proposal, or as usual, have you exempted yourself and your political cronies?

It is you, Captain Bullshit, and your political co-conspirators called Congress who are the "greedy" ones. It is you and your fellow nutcase thieves who have bankrupted America and stolen the American dream from millions of loyal, patriotic taxpayers.

And for what? Votes and your job and retirement security at our expense, you lunk-headed leech.

That's right, sir. You and yours have bankrupted America for the sole purpose of advancing your pathetic, political careers. You know it, we know it, and you know that we know it.

And you can take that to the bank, you miserable son of a bitch.

P.S. And stop calling Social Security benefits "entitlements". WHAT AN INSULT!

I have been paying in to the SS system for 45 years. "It's my money"- give it back to me the way the system was designed and stop patting yourself on the back like you are being generous by doling out these monthly checks .

To be fair, while the lady is quite correct in excoriating Sen. Schumer and his co-conspirators in Congress, she is wrong on one fact: Social Security was a Ponzi scheme from the outset. There was never a time when money was put away in an interest-bearing account for the benefit of the taxpayer; every nickel that went in on Monday was paid out (less an 'incompetence skim' called overhead) to a Social Security recipient on Tuesday. On the rare occasions where there was a nickel left over at the end of the year, it was deposited in the Treasury general fund and an IOU placed in a cabinet labeled 'Social Security'. Now that it's payback time where recipients outnumber taxpayers, either recipients will be cut or taxes hiked.

That's why I've been pushing so hard for privatizing Social Security - so my grandchildren will have a chance.

BUT THERE'S ALWAYS IRMAA: Social Security is running out of money.

What interests me is not that Social Security is running out of money but that a 'typical newly retired, dual-earner couple will see their Social Security checks reduced by $17,400 annually.'

Let's do the math [FWIW, I learned math when it still involved numbers]. As of 2024, maximum benefit is $3,822/month, or $45,864 annually. To receive that amount, the recipient would have to be 66 years old and earned the Social Security maximum for the prior 35 years.

So a 23% reduction in benefit would be $10,549 each, or $21, 098 for that newly retired dual income couple. My wife and I were solidly upper middle class when we retired and I suspect our social security income is higher than average. That said, the 23% reduction for us would be only about $12,000.

So to claim a $17,000 reduction for a 'typical newly retired dual-income couple' is more than a bit disingenuous, it's a lie.

Then there's the income-related monthly adjusted amount (IRMAA), meaning the 'you make too much money outside of Social Security' tax, which is an additional 17% ($5,000) reduction in our Social Security income.

Many more such reductions and we'll owe Social Security every year....

FROM MY EMAIL: a little history of Social Security. Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program. He promised:

1.) That participation in the Program would be completely voluntary;

2.) That the participants would only have to pay 1% of the first $1,400 of their annual incomes into the Program;

3.) That the money the participants elected to put into the Program would be deductible from their income for tax purposes each year;

4.) That the money the participants put into the Independent 'Trust Fund' rather than into the General Operating Fund, and therefore, would only be used to fund the Social Security Retirement Program, and no other government program; and,

5.) That the annuity payments to the retirees would never be taxed as income.

Since many of us have paid into FICA for years and are now receiving a Social Security check every month -- and then finding that we are getting taxed on 85% of the money we paid to the federal government to 'put away', you may be interested in the following:

Q: Which political party took Social Security from the Independent 'Trust Fund' and put it in to the General Fund so that Congress could spend it?

A: It was Lyndon Johnson and the Democratically- controlled House and Senate.

Q: Which political party eliminated the income tax deduction for Social Security (FICA) withholding?

A: The Democratic Party .

Q: Which political party started taxing Social Security annuities?

A: The Democratic Party, with Al Gore casting the 'tie-breaking' deciding vote as President of the Senate, while he was Vice President of the U.S.

Q: Which political party decided to start giving annuity payments to immigrants?

A: Jimmy Carter and the Democratic Party.

Even though the email is clearly partisan, the lesson to be learned is nonpartisan: the Government is under no compulsion to honor the terms of a contract. Which is why I strongly favor privatization (it's also a better financial deal).

MORE ON SOCIAL SECURITY

Last November I posted a comment on my expected Social Security income, pointing out that it will be nowhere near the income I would have had I been able to invest the payroll tax money in a 401k-type retirement account. But my earnings put me at the higher end of the wage spectrum, and Social Security payouts are strongly biased toward the low-end wage earner, so I decided to do the identical calculation for a low-end wage earner to see if my results still held.

Consider the case of John Doe. Born January 1, 1941, John started working on January 1, 1957 at age 16 at a minimum-wage job, which he kept for the next 50 years, retiring on January 1, 2007 at the age of 66. John never earned more than the minimum wage.

Using the Social Security PIA (annuity) calculator, John will take home from the Social Security Administration the princely sum of $881/month for the rest of his life. Each year that amount will be adjusted for inflation.

Now consider the case of John’s twin brother, James. James also worked from the age of 16 to 66 at the same minimum-wage job as did John. The difference is that James was allowed to take his and his employer’s FICA (payroll) tax and invest it tax-free in the stocks that make up the Dow Jones Industrial index, which James faithfully did. On January 1, 2007, James had accumulated $224,468, which distributed on a 30-year payout at 5% interest, will give him a monthly income of $1,158.

Assume that John and James both live their expected lifetimes, which according to the United States Life Tables, 2003 is age 82 (16 years). When he dies, John will leave his heirs nothing. James will leave his heirs $144,531.

Explain to me again why Social Security shouldn’t be privatized. Better yet, explain to John why his identical twin James is taking home 30% more income in retirement.

[A note on methodology. I used the minimum hourly wage and FICA tax rates from 1957 to 2007 to compute John and James withholding taxes. The total (employee plus employer) withholding was $36,632 for each over 50 years. Each had a final (2007) salary of $12,168. John’s social security check represents 87% of his final salary; James’ annuity income represents 114% of his final salary. To estimate James’ heirs inheritance, I used the standard mortality tables which give an average expected lifespan for a 66-year-old male of 16 years. All of the data is easily available on the internet.]

PROGRESSIVE IDIOT ALERT: No, the GOP isn't cutting your Social Security and Medicare.

To find out more of my thoughts on why Social Security is such a debacle, here is a compendium of old thoughts on Social Security. They're in no particular order; that's the way Blogger works. Some of the posts are direct responses to an old Social Security subgroup that was within the MoveOn organization.

I would additionally note that before Biden, my Social Security payments were regular and correctly calculated. During the Biden administration, they have been royally screwed up and Social Security totally nonresponsive to my letters and emails. Now that Trump has taken the reins again, at least the monthly payments are on time and correctly calculated. (The leftover Biden era errors I'm going to let slide; it's too painful to continue the one-way 'conversation' -- and the remaining errors are in my favor.)

NERVOUS LIBERALS TO CONGRESS: Get your grubby hands off Social Security.

Robert Greenstein of the left-leaning Center on Budget and Policy Priorities said Thursday the debt commission plan [for Social Security] is flawed in ... how it deals with Social Security, and members looking to make it the basis of a plan [to reform Social Security] should be wary.... Greenstein said he originally did not object to reforming Social Security ... but ... rushing to do it now could lead to a botched reform.

“If you try to do everything all at once, you run a greater risk of producing a plan that has serious flaws,” he said.

Well, yeah -- witness ObamaCare, which (if I remember correctly) was a ‘left-leaning’ rush job.

WHAT PARTS OF THE GOVERNMENT should be permanently furloughed?

Foreign Policy magazine tends to be a liberal domain, so there’s lots to quibble about in the first 8 items, but they generally come off as reasonably thoughtful. But the ninth? The best that can be said is that Michael Lind, of the New America Foundation, has come unglued. Here is his contribution (in italics):

[T]the federal government is too small, not too large, and should be expanded. At the price of inefficiency, things which could be done more simply and efficiently by the federal government have been delegated to the states or subsidized private corporations.

Name one thing - just one - that the federal government has ever done more simply or efficiently.

For example, hybrid federal-state programs like Medicaid and unemployment insurance are threatened by unstable state revenues, unlike purely federal programs like Social Security.

Uh, Social Security is stable? Only Harry Reid doesn't recognize it is destined for eventual bankruptcy.

Tax-favored private retirement savings programs like IRAs and 401k's are riskier than Social Security and allow brokers to fleece unsuspecting clients with their fees. These programs should be shrunk and Social Security should be expanded.

Not so. My social security check is not nearly as big as it could have been had I been allowed to invest privately what I paid in FICA taxes.

Medical cost inflation threatens both the efficient Medicare program and the dysfunctional, employer-based health insurance sector.

Employer-based health “care” is dysfunctional because of government interference, not in spite of it.

The solution is cost controls, not rationing access to health care by Americans.

Wrong again. Cost control is a means of rationing access.

In a rational country, the federal government would take over functions that never should have been shared with the states or off-loaded onto the private sector.

Only if “rational” and “insane” are synonyms.

Higher federal taxes would be offset somewhat by lower state taxes and the abolition of tax subsidies for private insurance and private retirement savings.

It’s sufficient to just say “higher federal taxes.”

MORE ABOUT WHAT THE DOGEr'S found in their Social Security investigations.

In 2021, 270,000 non-citizens got social security numbers. In 2024, 2.1 million non-citizens got social security numbers. We went in to find fraud and found this....

And it's not just about stealing Social Security benefits -- the Social Security number is a gateway into registering to vote, voting, Medicaid, long-term disability, and so on.

SOCIAL SECURITY AND MEDICARE IN THE NEWS:

Cuts are coming to both.

Social Security to go broke in 10 years.

Biden’s Social Security pledge will likely mean huge middle class tax hikes.

As a not-too-recent retiree, I'm hopeful (no, not really) that our political class will soon have the courage to touch these 'third rails'.

If you're interested in social security, consider my series of posts on social security privatization over the last several years. They're in no particular order given the way Blogger's search function works.

THINKING ABOUT SOCIAL SECURITY

For those who think Social Security is a “really good deal,” here’s a factual tidbit.

My wife and I will begin drawing our social security income in January 2008, retiring at the ages of 62 and 63 respectively. My wife has had FICA taxes withheld continuously only since 2000, and intermittently before 2000. I’ve had FICA taxes withheld continuously since 1972.

If we had each been able to invest just our employee contribution in the Dow Jones industrials each year we had taxes withheld, we would be able to purchase annuities today that would pay only 5% less (wife) and 47% more (me) than we will receive in monthly benefits from the Social Security administration. Since social security payments are strongly biased in favor of minimum-wage or short-time contributors, (partial) privatization looks pretty attractive to me.

THE 'CENTERIST' PUBLIC OPTION

E.J. Dionne knows Americans want government-sponsored health care; but

Because opponents know from polling that the public wants the chance to choose a government plan, they move the discourse to abstract and often demagogic ground.

Reasoned opposition isn't an option, eh?

The most revealing "argument" during the Senate Finance Committee's public-option debate on Tuesday came from Sen. Chuck Grassley. "The government is not a fair competitor," [Sen. Chuck] Grassley said. "It's a predator."

So Dionne asks: "Is it predatory for government to pay health bills for the elderly?"

Well, consider the complementary question: Is it predatory for the government to not allow anyone else to pay health bills for the elderly? Because once I turn 65, I can't opt out of Medicare.

Dionne then asks: "Is Social Security, which lives side by side with private pension and savings plans, predatory?"

Oh. please. Social Security was never intended to be a retirement system. If E.J. believes that, he should read a little history. Social Security was - and still is, for the most part - a social insurance program. If E.J wants to believe Social Security is a retirement program, then it's easily provable to be far less efficient than simply saving for retirement in a 401k-like program.

SOCIAL SECURITY for me (just barely) but not for thee.

Since 1984, Social Security has raked in more in payroll taxes than it has paid in benefits, accumulating a $2.5 trillion trust fund. But because the government uses the trust fund to pay for other programs, tax increases, spending cuts or new borrowing will be required to make up the difference between taxes collected and benefits owed.

Experts say the trend points to a more basic problem for Social Security: looming retirements by Baby Boomers will create annual losses beginning in 2016 or 2017.

Former President George W. Bush tried to privatize Social Security and failed; now the chickens are coming home to roost.

IT'S ALL THE ELDERLY'S FAULT: Why are we in this debt fix? What is the cure? And some people actually agree. This from the comments below the Samulson commentary linked to above:

MarkMacDonald wrote:Thank you Mr. Samuelson for stating flatly what I have believed for many years: seniors are eating the seed corn of the future and there is no end in sight. I am 54 years old and have made a commitment not to live longer than 70. I will work as long as I can and have no desire to retire at all. We all know that the elderly are by far the wealthiest group of Americans and yet their demands on current and future generations are insatiable: they want to retire earlier and the expect more assistance. Medicare currently subsidizes the purchase of Viagra and the natural decline of the sex drive is not described as a medical condition. The nonsense goes on and on.

"Dying early" is surely a fix for the Social Security and Medicare problems, one in which I suspect ObamaCare's 'death panel' will cheerfully accept. The American public, not so much.

Yet Samulson is largely correct; high taxes and the debt crisis are in fact largely attributable to the elderly via Social Security and Medicare. And both those programs are consequences of a badly flawed liberal philosophy. The thinking, such as it is, goes like this: Some elderly are desperately poor, cannot work, and have no resources (e.g., family) to support them in their later years. Therfore the government must provide Social Security support to all the elderly. Similarly, some elderly have significant health problems, do not have, and cannot get - at any price - even marginally useful health insurance. Therefore the government must provide Medicare to all the elderly.

Neither of those philosophical assertions are correct. As a class, the elderly are on the average wealthier than the younger workers paying for them. Some seniors are in need of support, obviously, but not all. And yet the liberal thought process (if such a thing actually exists) expects - no, demands - that seniors retire at 66 (or 67) and sign up for Social Security and Medicare. The programs are structured such that 'opting out' of the liberal Nirvana is very difficult, if not impossible. Why?

DAILY KOS CAN'T DO MATH. Or can't read, I'm not quite sure which. In a post keying on the Social Security debate, diarist Joan McCarter makes this claim:

[Caremark CEO Larry] Merlo has a retirement fund of $46 million, and if he invested that in an annuity starting at age 65, he'd get $263,169 a month for life. If he took Social Security, too, he'd get $267,445 a month.

The figure $263,169 is a bit high, but roughly on the mark, since a single-life annuity at age 65 generally pays between 6% and 6.2%. But the Social Security amount, $4,276 [$267,445-$263,169] is wildly off the mark, since as a simple Google search will show, the maximum Social Security benefit payable to anyone retiring at age 65 in 2013 is $2,513/month. It's also taxable.

Time for the Kos Kidz to go back to school.

COMMUNITARIANISM IS GREAT - until it's my turn to pay.

In the ongoing hue and cry over school funding in Texas, one thing is noticeably absent: the voice of the tea partyers.

Where are all of the letters accurately portraying our public schools as socialist? Where are the justifiable demands for property owners without children to be relieved of their school tax obligations? Where is the heartfelt insistence that families pay more for each child they have in the school system?

Let the voice of these patriots be heard.

Letter from reader Brad Smith in the March 21 edition of the Austin (TX) American-Statesman (who, bless its incompetent little heart, can't put anything online until at least one day after the print publication hits the street).

Well. I presume Mr. Smith is single, or childless, so let me ask him if he is willing to forego his Social Security, since it will be paid for by my children. Just in case Mr. Smith is unaware (which certainly he is) his - and some of my - FICA taxes are going to pay for his parents, of which I presume he has two.

And since he is obviously willing (being childless) to forego his Social Security benefits, does he think it is appropriate for me to receive a larger Social Security benefit since I have two children?

And yes, I am both receiving a Social Security benefit check and a tea party "patriot." And additionally for those of you about to go "Aha!" I am also willing to sacrifice some of my benefits for the common good.

GIVE ME A CHOICE

At present, I don't have a choice - at 65, I have to sign up for Medicare if I want to receive Social Security benefits, even if I have excellent coverage on my wife's plan. No Medicare, no Social security.

But that may be changing.

Seniors who want to collect their Social Security benefits and opt out of Medicare won a court victory recently that hopefully will pave the way for them to be able to do just that.

U.S. District Court Judge Rosemary M. Collyer denied a motion to dismiss the plaintiffs claim [that] the federal government has no right to force them into Medicare while holding their hard-earned Social Security benefits hostage.

If Ross Perot - and I - want to pay for our own health care, shouldn't we be allowed to?