Fully Privatize Social Security: The Looting of Our Retirement Savings Is the Product of Altruism

by | May 31, 2000 | POLITICS

Presidential candidate George W. Bush recently announced that he would campaign for the partial privatization of Social Security. Under Bush’s proposal, taxpayers would be allowed to invest a portion of their Social Security taxes in the stock market. This plan has been savagely attacked by the left, which claims that private investments are “too risky” […]

Presidential candidate George W. Bush recently announced that he would campaign for the partial privatization of Social Security. Under Bush’s proposal, taxpayers would be allowed to invest a portion of their Social Security taxes in the stock market.

This plan has been savagely attacked by the left, which claims that private investments are “too risky” to be relied on for retirement savings. But such claims are absurd — because any private investment would be a better financial deal than Social Security.

Imagine that you are 25 years old, and a salesman offers you the following: In exchange for 7.5 percent of your salary for the rest of your working life, plus a matching premium from your employer, you will upon retirement receive a monthly pension. Upon further questioning, however, you learn that the total payments you could reasonably expect to get would be less than what you could have gotten through a simple savings account.

Further, you discover that your money will not even be invested, but will be given away to the salesman’s brother-in-law to buy a car, to his neighbor to pay for college, to the local YMCA to renovate its basketball court. You will thus be paid, you realize, not from any returns generated by your funds, but directly from contributions by new “investors.” And what if there aren’t enough new “investors”? Simple, the salesman explains: Your benefits will be cut.

No rational person would buy into this Ponzi scheme. Yet that is precisely what Social Security is: Workers’ current premiums are used to pay for immediate government spending — while future benefits come from the taxes extracted from younger workers.

This is not news to most people. The destructive fraud inherent in Social Security has long been exposed by numerous commentators. But, absurdly, the left continues to denounce any proposed alternative to this system as “too risky.” Why is Social Security’s Ponzi scheme — which would result in a prison sentence if launched by a private citizen — viewed as untouchable? Economically, Social Security represents a colossal loss of wealth. What keeps this program alive is the morality behind it.

Consider the main argument leveled against any attempt to privatize Social Security. If we were left to manage our retirement savings on our own, it is claimed, some would fail to plan at all (or would invest foolishly), and would have nothing left for old age.

What this really means is that, in order to protect the irresponsible investors from their own folly, the responsible ones must have their savings ravaged. It means that those who are capable of planning for their future must be sacrificed for those who, supposedly, are not.

This viciously patronizing system regards people as essentially feeble-minded and helpless, unable to anticipate the requirements of old age. The government, therefore, must save them from themselves. How? By not allowing anyone to make his own decisions. And the tragic irony is that Washington, the epitome of blind short-sightedness, is “rescuing” us from our presumed stupidity — with a scheme so ruinous that only a fool would willingly participate in it.

But Social Security is not a plan designed to serve your best interests; instead, it is based on the premise that you must surrender your interests for the sake of others. Its purpose is not to help you pay for your own retirement, but to force you to pay for your neighbor’s — or your neighbor’s parents’.

This is why the left loves Social Security. It is a system under which all must sacrifice for all — and none may profit. Everyone is made dependent on government — and no one is allowed to provide for himself. The left doesn’t view such a program as a failure: It succeeds at achieving their altruist ideal — even at the cost of draining the people’s wealth and making it harder for them to plan for their retirement.

But it is time to reject the left’s premise of self-sacrifice and to assert the individual’s moral right to pursue his own self-interest. It is time to move to a voluntary system under which each individual is allowed to plan his own financial future with the money he himself has earned. George W. Bush’s proposal is a good start, but we should privatize Social Security completely.

Only then can we look forward to genuine retirement security — the security that comes from relying on one’s own thought and effort, not on the dishonest promises of a bankrupt, parasitical government program.

Robert Tracinski was a senior writer for the Ayn Rand Institute from 2000 to 2004. The Institute promotes the philosophy of Ayn Rand, author of Atlas Shrugged and The Fountainhead. Mr. Tracinski is editor and publisher of The Intellectual Activist and TIADaily, which offer daily news and analysis from a pro-reason, pro-individualist perspective. To receive a free 30-day trial of the TIA Daily and a FREE pdf issue of the Intellectual Activist please go to TIADaily.com and enter your email address.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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