Social Security
Once upon a time there was a village in a beautiful river valley. This was a very poor village, however, because every spring, when the snow would melt in the mountains, the river would overflow its banks and wash nearly everything away. Finally, the village fathers and mothers got together and, marshalling all their resources, built a dam upstream. The flow of the waters was controlled and the village prospered. Three generations later, however, their great grandchildren got to looking at the dam. “I don’t like the dam. The dam is ugly,” said some. “The dam is expensive to maintain,” announced the left-brained among them. Others had different complaints. And one dry summer they tore it down.
Social Security is the radical program that provides every worker and his/her dependents at least some guaranteed minimum standard of living even when the worker becomes disabled, old, or dies. The program has been under attack by the Usual Suspects since before its inception some three-quarters of a century ago. The pace of the attack has accelerated, however, in recent years as companies have moved more and more from guaranteed benefit pension plans (like Social Security) to so-called guaranteed contribution plans (like 401-Ks). In the latter, what the worker eventually gets is a function of how well he/she fares in the securities markets.
In recent months, however, the drumbeat for the phony reform of Social Security has dropped to a whisper. The war has been a distraction. People have become aware once again that the stock market goes both up and down. And thousands of Enron employees who bet their retirement money on the wrong horse are on the nightly news.
Nevertheless, when things straighten out, the critics will be back. A favorite criticism is that workers would “do so much better” out there in the market. This would seem to open the door for a compromise. Yes, by all means, convert to the new system of private accounts, investments, etc. But guarantee that workers will get at least what they get under the system we have now.