Tuesday, August 16, 2005

Column on Social Security Risk

Is State Funded Social Security Risk Free?

Tibor R. Machan

Over the last several years the idea of including some private accounts
within the social security system has gained a bit of ground in the
political arena. Not that it?s been a piece of cake. For one, most people
are used to this government confiscatory program, as they are to
government schooling or the minimum wage law. The governmental habit is
rife throughout the world, including in America.

There is, also, the way promoters of the government?s confiscatory
program distort what privatization comes to. Even this tiny bit of
option?no one actually would need to go private with the 4% that could be
put into personal accounts, it?s just an option?is mischaracterized as
uniquely risky. And that assumes there is no risk with the government?s
coercive system.

Why do folks accept this canard? Why do they buy into the story as told
by Paul Krugman & Co.? Surely governments have defaulted on many of their
promises and have left people without support as they have played
political football with various projects.

Indeed, the entire social security program is in a way a hoax?no one can
really obtain bona fide security in old age from what this program
provides. Even if you have worked like a dog all your life and the
government has extorted portions of your earnings for your own good,
getting back roughly $1500.00 a month when you reach age 65 is hardly
going to make you secure economically, socially or any other way. The
money confiscated from you by the feds is barely enough to feed your pets.

So where do the champions of this utterly failed program come off with
their ruse about how the miniscule privatized portion will be oh so risky,
while the government?s scam is brimming with certainty?

The idea, I think, stems from the belief that coercive force is something
that can always be relied upon. And there is something to this, but only a
little bit.

Whenever people reach a point of exasperation, they are tempted to deploy
force?against their children, spouses, even friends, not to mention
strangers who aren?t in a position to strike back (as it happens with all
the redistribution of wealth legislation and public service conscription).
If you cannot get anywhere with some by reasoning with them, by trying to
persuade them or by imploring them to do what you want, at last resort
smack them around a bit, just as those loan sharks do with their clients
who will not pay up.

Yet, a policy of deploying coercive force against recalcitrants is at
most a very short term, temporary solution to solving any kind of human
problem. This is true, of course, with social security as well. The
collection of this part of what the government extorts from us falls way
short indeed from solving the problem of old age economic insecurity. It?s
a pittance. Without personal savings or some other support system to
supplement it, social security will get you virtually nothing. So,
clearly, it is no solution to the problem it is supposedly designed to

And that is just what the fate of all coercive measures tends to be.
Force against other people only works well as a policy of self-defense or
retaliation. But never as the first step. The horrendous risk of deploying
coercive force is to create a citizenry that?s complacent about its
security and misguidedly relies on the government to take care of it in
old age. That is a far greater and more destructive risk than anything one
may face with the stock market or other investment options where the money
left in one?s own hands to manage for one?s own good. If people realized
there is no mythical risk-free government social security, that it is
indeed the ruse the critics must always have known it is, most of them
would likely start thinking early in their lives about their old age
security, get competent advice about it, and reap the fruit of this policy
of prudence so they really do have something to fall back upon when the
need arises late in their lives.

There is no bona fide guarantee with government?s coercive policies, only
the illusion of it, as with all reliance on a policy of coercive force in
human relationships.

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