Greece should be sparking more talk about how we address the runaway spending in this country, which is due in large part to the dysfunctionality of our Social Security system. Now I am not going to propose anything about cutting your Social Security benefits, which is what the Democrats scream about every time someone brings up this problem. They don’t want anyone to consider real solutions to this problem.
Greece has promised retirees more and more free stuff, and they can’t pay the bill. Why do we think it's going to turn out any differently here?
When our Social Security system was designed in 1935, it was based on certain assumptions about life expectancy, which no longer apply today. It was also based on assumptions about what each of us would have to contribute to the system, which likewise no longer apply today.
Back then, Social Security presumed to never tax you on more than $3,000 of your income, and never at a rate of more than 3 percent. Today, it’s $100,000 of your income, and at 12.4 percent.
And because they have tried to be sneaky about increasing the rate (and Republicans have resisted that as well), you’ve now got Social Security spending on auto-pilot. Whenever someone like Rep. Paul Ryan recommends an approach to restructure Social Security, he gets presented as throwing Granny off a cliff.
Why? Because the media want you to remain ignorant – not only about how broke our system is, but also about what two countries have done to fix their systems.
Republicans could have proposed any number of approaches. One of the really good ones is currently in use in Chile. Prior to 1981, folks in Chile had a system like our current one, and they were having to pay 27 percent of their income to support it! When Chile finally got a real leader who was willing to take on this problem, the nation introduced a new system based on individual, privately owned accounts. Currently, 70 percent of workers are covered by this system – each with their own individual account that belongs to them and not to the government.
Plus, if you want to put in more money toward your retirement, you can do that. Who would voluntarily put more money into the U.S. Social Security system? No one! But in Chile people are glad to do this.
George W. Bush tried to do something like this in 2005, but the Republican Congress of that time had no interest in going down that road and they left him high and dry. Would the Republican Congress of today be any better? You’d think that if they really looked at what they’re doing in Chile, they’d want that in the United States.
Even Canada, home of socialized medicine, had the foresight in 1997 to set up the Canada Pension Investment Board. This board monitors and invests the funds handled by the Canada pension fund. Our Social Security dollars aren’t invested! Granted, the bureaucrats who run the system now wouldn’t make good investment decisions. But why not empower people who know about investing to do it? In Canada, the fund has grown from a mere $37 billion to more than $265 billion.
That’s two ideas that are both vastly superior to what we’re doing now, but no politician – certainly no presidential candidate – from either part is talking about ideas like this. Nor are the media. I guess they’d prefer to see us go down the same road as Greece.
So, those of you who insist that Social Security must never, ever be changed . . . do you want to see us end up in the same place as Greece? Because that’s where we’re headed.
