Social In-Security

Two people get their paychecks at the end of the month. The first person looks at his paycheck and sees that about 6.5% of his check goes to Social Security (the other 6.5 plus percent is paid by your employer). That’s ok he thinks to himself. I will have my retirement income taken care of so I can spend everything else; I don’t have to worry about saving. The second person looks at his paycheck and there is no deduction for Social Security. There is no security blanket for his retirement so he does put some of his money away in various investments.

The first person illustrates how the Social Security system has trained the American people to not save for retirement. I would tell anyone who challenges this theory to look at two things: the savings rate in America and the fact that so many people rely solely on social security for retirement income. On the surface Social Security sounds fine, but there are many problems with this system.

The first problem is that Social Security does not pay out enough in benefits to uphold most people’s standard of living. This combined with their inability to save for retirement puts many in a very dire situation. This, of course, is the government’s fault because they do not tax the wealthy enough to provide retirement for these people.

The second problem is twofold and it all lies with the fact that the government is managing people’s retirement. The Social Security program has produced a surplus almost every year it has existed yet because congress cannot balance a budget, this fund is always tapped in to so it basically doesn’t exist. The surplus money that is saved is only invested in government bonds; therefore, will never be able to perform as well as even a basic equity fund. This just proves the point that President Bush has stated time and time again; this money should not be controlled by the government, but should instead be given to the people so they can choose the investments for their retirement. If the social security program goes away, people will be forced to take more responsibility for their retirement savings, and there will be no one to blame if they do not.

A change to Social Security would help not only the government, but also the people and the companies that are mandated to pay into it. Socialist programs such as these will be difficult to change and will require some growing pains, but it must be done to rid the government of this burden, and to help the American people provide for themselves in retirement.