(photo courtesy drhurd.com)

By Josh Weizel – Editorial Editor

The Social Security program began in the 1935. The program originally had the intention of allowing retirees to live independently and with dignity. This public pensions program is funded by workers paying into it in payroll taxes with the promise of getting back that money during their retirement years.

There are various proposals of how best the U.S. can reform Social Security, which is running out of money and could one day go bankrupt. One of the proposals is partial privatization of the program, which would allow workers to put aside their benefits into private accounts. Supporters of partial privatization argue that it will give workers more choices to invest their money in the stock market, and reap the benefits of a greater return.

Critics of privatization argue that investing Social Security money in the stock market is risky because workers can lose their retirement safety net if the decisions they make in the market don’t work out.

Social Security is the largest single program that makes up the federal budget in the nation, of which there is high need and demand, especially with an increasing Baby Boomer population reaching retirement age. One argument for Social Security privatization is that it will give more choice to higher wage workers, while opponents insist it will put lower wage workers in particular at higher risk.

Every election year, politicians exploit the fears of seniors that their opponents are going to take away their Social Security benefits instead of talking about meaningful reforms to the system. There is a lack of honesty in our political system regarding Social Security. That’s because no political leader has been willing to be bold and telling people the truth in dealing with issues that are unpopular. Political leaders in both parties have ignored the hard reality that if Social Security continues on its current path the program will be physically unsustainable for future retirees. Unless there are serious reforms, Social Security will be unable to pay back the funds to the people who have earned and been promised that money during retirement.

This country was founded on the principle that men have ownership over the fruit of their own labor. This means that they have a choice about what they would like to do with their own income. What we have to realize is that in the present time the money we are putting into Social Security does not belong to hard working contributors. It is not the property of these workers because politicians are free to raid the Social Security trust fund, which they have often done. This makes it more of a tax than a real fund for retirees. There is no longer a set trust fund for Social Security but instead politicians are paying back contributors by taxation and also distortion of the monetary supply.

Our nation was the first distinguishing country on the earth founded on something extraordinarily different. Our country was founded on the individual creativity and inventiveness that comes from individual men. The current Social Security system is a contradiction of the very principles that this country was founded upon. Workers are forced to pay into the system and young workers do not have a choice of when they can take that income out to use it when they need the money at a younger age. The present system is more of a Ponzi scheme for the young generation. Young people pay more into Social Security then can ever hope to get out of the system.

Social Security should be a system where individuals work hard to get all the money they earned and to get higher rates of returns. As now constituted, Social Security is a program that redistributes from one group to give to another group.

Government redistribution programs discourage wealth creation, which affects economic growth and does more harm than good to the most vulnerable. The best thing as a society we can do for the most vulnerable is to maximize the opportunities and creativity of a free market system so workers can greatly increase their potential and create success for themselves, instead of promoting division and class warfare. If young workers were given a choice to invest in private accounts, it would provide them more control over their own income and more direction over their own lives. There should at least be partial privatization of Social Security because there is no guarantee that younger workers will get all the benefits they have contributed into the present system. It is only moral that young people be allowed to invest in private accounts because individuals must be trusted to use their money, instead of government bureaucracies. If Social Security was partially privatized, it would not endanger the traditional Social Security system for those already eligible for the program, and it would not endanger the system for those who choose to be part of it. It would give workers a choice of whether they want to be party of the private system or the government system, and would allow younger workers to choose if they want to have a higher rate of return in the stock market.

Young workers should be given a choice to invest in private accounts because the current Social Security system benefits for future workers are not guaranteed. The opposition against giving young workers a choice to invest in private accounts is strong and organized because critics want to protect the status-quo. Young workers should be given a choice because they have the most knowledge about how to make individuals decisions for their retirement. This is not some radically new idea, as some argue; this has already been done in countries like Sweden, which has partially privatized Social Security. In Sweden, it has led to great success because it provides for a level playing field and fairness for all workers, as they receive  income back when they retired based on how much they worked in the their life. These workers have a choice to put their money into government accounts or in private saving, where they receive a higher rate of return.

The government cannot just keep spending and printing money and expect no impact on the economy. Partial privatization of the Social Security system has made it stable in Sweden because it limits the amount the government can spend. It was calculated that in order for the old system to continue, the Swedish government would have had to have a payroll tax of 36 percent by 2025. The level of government spending and taxation would have negatively impacted the economy of Sweden. The United States should use Sweden as a model because it would give workers choice and direction over their own retirements, and it would be more fiscally responsible. The opposition argues that giving individuals a choice to invest in private accounts is too risky because some people could lose their investments in the stock market.

What these opponents fail to realize is that it does not have to be in private stock market accounts because individuals should do whatever they see fit with that income. The other argument against partial privatization of Social Security is that it will ruin our collective idea of helping others as a nation. The fundamental problem with this argument is that it fails to recognize that giving individuals a choice to invest in private accounts would maximize human potential and human creativity. Every dollar redistributed in the form of payroll taxes from Social Security is one less dollar the less disadvantaged can use in ways they see fit. After all, local communities are more efficient at helping the poor then big government bureaucrats. This has not only discouraged the idea of charity and philanthropy, but has also discouraged disadvantaged workers from being able to support their family by saving and investing money to give their children more opportunities that they did not have.

The enemies of freedom and liberty put these arguments into consideration. They don’t consider the possibility that if Social Security was not a forced redistribution program, there could be more maximized opportunity for the poor. This could happen in the form of philanthropy, since more money is left in the hands of individuals. Unfortunately, opponents believe the government spends the money of individuals better than individuals can in the free market. What opponents fail to understand is that individuals have more knowledge about how to invest their own resources than the government. In fact, the government program does not lead to the most amount of success in a free market society

The partial privatization of Social Security is not something that can happen overnight and current retirees and those approaching retirement should be granted their full benefits because they paid into the program for their years of dedicated work. Instead, the partial privatization of Social Security should go through a transition period and younger workers should be given a choice to make decisions about their own retirement. Younger workers should be able to choose if they want to put that money into government or into private accounts to gain a higher rate of return. America is a country that should not empower government bureaucratizes to run our lives and make decisions for us, but instead we should empower individuals to make decisions about how to run their own lives.

As a country we should empower young people to use their own knowledge for their own purposes in deciding what is best for their own personal retirement. This is more than just an issue about making Social Security solvent because this is also an issue about personal freedom and liberty. Individuals are more than just a Social Security number, but instead are people with unique traits and characteristics.

(Some information courtesy cbo.gov, econbrowser.com, socialsecurity.procon.org, heritage.org, classicprinciples.org)