Social Security

This whole social security debate has me a little befuddled. Social Security is an insurance policy, a social contract where you agree to contribute to the earnings, and in return you are guranteed enough money so that you are not living in a cardboard box eating out of trash cans when you become disabled or are in the waning years of your life.

One thing Social Security is not is a savings/investment plan. Those are called 401k or IRA plans. Or Heaven forbid, other personal savings!! With a net savings rate of 0% and people cashing out the equity in their homes to buy plasma TVs, I guess I shouldn't be so puzzled over people looking to the gov't to take care of them.

To me Social Security is like the insurance you have on your house or your car, you pay it dutifully, year to year, month to month in the event that God forbid you have to use it. No one in their right mind would expect that their homeowner's insurance would pay for finishing the basement, putting up that new fence, replace the air conditioner, buy a lawn mower or any number of other things that home owners face. Likewise you would not expect your car insurance to pay for an oil change, or to replace a timing belt or water pump.

So why do we expect Social Security to pay for the everyday things that we want, or to improve our lifestyle in retirement. Playing golf everyday, taking vacations/trips and eating out are not things that should be guaranteed in life.

Personally, I think it has to do with the "entitlement" mindset that I see running rampant around the country. I always hear people say, "I deserve this", "They owe me that!" To quote Colonel Potter...Horse Hockey! You go out and work hard and earn what for the things you need and want. At the end of the day you thank God for the opportunity to do it. This country was built on the concept of hard work, not entitlements. If you don't want to work, there are millions of people in other countries very willing to take your job. That is a rant for other day....


Private accounts only feed the "savings plan" mindset. If we could have private accounts on something, I would want it on auto insurance. Imagine if half your auto insurance premium went into a private account that earned interest, and if you did not use the money to pay for an accident, then you got it for the downpayment on the next car. I don't see it happening.

I am all for scaling benefits...If you have a couple million setting in the bank, that $12,000 from Social Security each year is not that important and you are definitely not in danger of pushing a shopping cart around town looking for handouts. To those with no savings, or high medical bills, that money is more than a lifeline.

Here are some links for more info on Social Security:

Good piece on dispelling some of the Social Security Myths at the Motley Fool

Social Security Network, contains articles, links, statistics and reports.

Until the next rant,