Walter Williams’ column calls on elder citizens to abandon social security “entitlements” because they’re bankrupting the country. He claims the average retiree in 2000 gets back all he paid in within 20 & ½ yrs. Not so fast Mr. Williams – three gaps in your logic: 1) you’ve neglected the time value of the use of money, that is interest. We’re told the same funds randomly invested in the stock market would produce more return by retirement age than the social security benefits; 2) when the retiree and spouse (if any) die early the government keeps a windfall; 3) if a private company misused its pension reserves for other business, we call it fraud or embezzlement. Governments, however, aren’t held responsible. It was last decade’s Congress and President who promised that reserve – we new guys aren’t responsible. Besides we had to have the funds to offset against our deficit spending.
Will some things have to give in the tug between the generations? Maybe. But let’s not let Williams to pretend social security benefits are something for nothing – or even a fair return on amounts paid in. They're Not!
Subscribe to:
Post Comments (Atom)
Perhaps the biggest government embezzlement program (sic--it is a 'program' and not an unwelcome but inevitable fact of economic life as we are led to believe) is inflation caused in the long run principally by going off the gold standard. As long as we the people authorize our government to print money that is not tied to gold, inflation will continue to be a 'hidden' tax. Keynes, in warning about the menaces of inflation, said "By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some".
ReplyDelete