And now to the core of our debate on Social Security. With sufficient prodding, my conservative friends came out with the real reason they are against social security: “Social security is not an ‘insurance’ program, it is an entitlement program.” To a conservative, “entitlement” signifies everything that is wrong with America: government programs that encourage bad behavior because people are not forced to live with the consequences of their bad decisions.
Certainly, any program that encourages bad behavior, or incentivizes bad decisions, is misguided. But is that really what Social Security does? Are the 40% of retirees that rely on Social Security to survive really just a bunch of lazy good-for-nothings on the government dole, laughing all the way to the bank while real, hard working Americans suffer to pay for their vices? The image is ludicrous. The problem with this cartoonish characterization of “entitlement” programs is that it makes a very significant (and self-serving) logical fallacy: that the outcomes in one’s life are solely a result of the choices one makes.
There are three predominant factors that impact outcomes in life: one’s natural abilities, the effort and choices one makes, and the circumstances of one’s life that are outside of one’s control. Is it right to blame someone for lack of natural ability, or bad luck? There are plenty of people that have worked harder in their life than me and have barely gotten by. The formula that poor = lazy is so full of exceptions that it is more likely an exception to the rule that poor = hard work.
[So why is this “entitlement” logical fallacy self-serving? People who are successful in life want to take credit for their own success.]
Of course, the liberals have their own entitlement fallacy: people’s failures are predominantly a result of a life stacked up against them. Like the conservative entitlement fallacy, it simplifies the complex reality of consequences to the point of cartoonish caricature: the rich aligned together in a vast conspiracy to keep the poor down.
But my opinions as to the value of Social Security go beyond the simple statement that the vast majority of people that receive Social Security are not being rewarded for bad decisions. Consider the man (or woman) who really did make bad decisions throughout his life – never considering what it would take to survive at 70. Suppose he now has reached that age without friends or family able to help him, and without the means to help himself. Some people may be OK with watching him slowly starve to death, or die from lack of simple, basic medical care. I am not.
I believe that every human being has intrinsic value independent of how much that person contributes to a market economy. This belief alone is enough to justify a “safety net” social policy – providing a collection of programs that work to prevent death due to extreme poverty. Social Security is one such program – and arguable an exceptionally successful one. For those opposed to Social Security on philosophical grounds, don’t kid yourself: without it, many people will die, old and desperate.
If Social Security is a safety net, why does Warren Buffett collect a Social Security check every month? If Social Security is a safety net, why do you have to pay in to Social Security before you collect? That doesn’t sound like a safety net to me. It sounds like a defined contribution plan.
But let’s be honest: Social Security isn’t about helping the poor; it’s about buying votes. The poor, by and large, don’t vote so politicians don’t waste their time on them. Instead, they target union workers and the middle class – people who think Social Security actually benefits them when, in fact, it’s robbing them blind.
The problem with saving for retirement is that no one can possibly understand how much their health care will cost them in old age until they get there. Making revisions to Social Security without taking a look at the obvious flaws in the current Medicare benefits is like (pardon the analogy) ripping a hangnail from a gangrenous toe.
My husband’s grandparents have lived frugally on a modest income for their entire lives. Now they’re millions of dollars in debt after just a year of ICU and surgery, for only his grandfather. These are people who survived the Great Depression with a savings account. The cost of health care is ridiculous, unless you settle for subpar care in a government-funded facility. Believe me, we paid enough when Neilen was born that I understood why some of my coworkers had committed fraud to qualify for Medicaid.
A program designed to help our older population to live more comfortably (or just to live at all)? This should be a non-issue, in my humble opinion. These are the people who powdered our bottoms. The least we can do is contribute a portion of our paychecks to buy their medication.
(I’ve grown addicted to your blog, as you can see, haha. How are your wife and girls?)
Bill’s comments above include one valid point and then some silly vitriol. It is a valid point that there is no reason for Warren Buffett to be collecting a Social Security check. I’m in favor of a means test to limit benefits to those that need it.
It’s not "silly vitriol". As things currently stand, the middle class stands to gain absolutely nothing from Social Security. With the 12.4% tax rate, the 36% replacement rate and the retirement age of 67, the middle class can expect to pay more in to Social Security than they get out. So what’s the point?
At this point, Social Security is pretty much a guaranteed losing proposition. Everyone would be better off taking their FICA dollars and sticking them in a high-yield, FDIC-insured savings account. At least then, you wouldn’t be guaranteed a negative rate of return.
Bill, your comments are exactly correct – if Social Security was ment to be an IRA. It’s not. The goal is not for middle class workers to get more out of it than they paid in. It’s for the lowest income workers to be able to live in retirement with just a bit of security and dignitiy. As I mentioned in a previous blog entry, Social Security is an insurance program, and like fire insurance on our home, we should all hope that we get a "negative rate of return" on the premiums. That’s success.
Not so, Chris. The middle class (and indeed everyone) used to get a decent return out of Social Security. That was back when the ratio of workers to retirees was high and the tax was low. Sadly for the middle class, those days are gone.
So what you’re basically saying is that Social Security is a welfare program and the middle class has the dubious honor of paying for it. No wonder the middle class is having such a tough time. We tax the crap out of them and then give them nothing in return.
You think it is tough being middle class? Try being poor.
I have no problem with helping the poor. I just don’t think the middle class should be taxed to the hilt to do so. Currently, the United States spends about $1.5 trillion on social programs. Despite this massive spending, our success rate is only about 45%. Of the 55 million people living in poverty without government assistance, 30 million remain in poverty after the myriad of government programs.
So that really makes me wonder… where is all the money going? We’re spending almost $28K per person below the poverty line. Given that the poverty line is $10K, we should be able to elevate EVERYONE above the poverty line. In fact, we should be able to do so with significantly LESS than $1.5 trillion: $562 billion according to my calculation.
Yes, the poor have it rough. But let’s be honest. Social Security doesn’t help the poor. It taxes them just as much as it taxes the middle class. They pay the same 15.3% as everyone else. If they’re lucky enough to make it to 62, they might get some of that money back. In the mean time, we have to maintain the Ponzi scheme that is Social Security. After all, Warren Buffett is expecting his check.
I’m so glad I live in Australia.Also, you guys are talking about a bunch of issues at once: Welfare, pension, and health care. You need all three.Also tax your rich more.