Social Security heading toward a death spiral
Published: Tuesday, February 1, 2005 at 6:01 a.m.
Last Modified: Monday, January 31, 2005 at 10:44 p.m.
In response to Chris Sistrom's letter (Jan. 29), I must thank him for his useful suggestion to strengthen Social Security.
However, I must plead innocent to the ominous machinations envisioned by the straw man arguments he advanced in his comments regarding my motives in my previous letter (Jan. 24).
In 1939, FDR stated: "We must expect a great program of social legislation, as much as is represented in the Social Security Act, to be improved and strengthened in the light of additional experience and understanding."
He urged "active study" of future possibilities.
Social Security is a pay-as-you-go system. Today's workers are paying taxes to support today's retirees. In 1940, there was a 42:1 ratio of workers to retirees. Today, that figure is 3.3:1.
With no changes in the current system, this ratio will dip to 2:1 within the lifetime of today's younger workers. Payroll deductions that had begun at 2 percent now represent 12.4 percent of gross pay for workers earning less than $90,000 per year.
Unless the laws of mathematics are revoked, this means future generations will face an ever-growing demand by government.
As the individual is deprived of more and more income, the ability of the lower and middle class to gain financial independence will be greatly hampered.
It is a "death spiral." As individuals are deprived of more and more of their resources, they will become more dependent on government, requiring government to deprive them of more of their resources.
Sistrom was right. The Social Security debate is about ideology.
Quoting Jonathan Rauch of the National Journal (Jan. 15): "The key to the paradox is that Social Security reform is not, at bottom, an economic issue with moral overtones. It is a moral issue with economic overtones."
Comments are currently unavailable on this article