The Selfishness of Thinking Ahead
Financial columnist Michelle Singletary pauses amid the economic crisis to give a hard kick to the notion of privatizing Social Security as a method of preserving its long-term prospects.
The column resists selective quoting, so I recommend that you read the whole thing, but the essence is that Singletary describes retirement planning as a three-legged stool:
One leg of the stool is supposed to represent retirement savings. In the past, this meant a company pension. Now for many workers, it’s a retirement plan they fund themselves, such as a 401(k).
The second leg represents personal savings, such as cash bank accounts or certificates of deposit. The savings component might also include other assets, such as your home.
The third leg is Social Security, which provided at least half the income for 64 percent of seniors in 2006.
She goes on to admit that fewer people have any sort of pension plan or retirement savings, and more and more people, far from saving, are in debt. As for Social Security, it “remains problematic”:
“Social Security’s current annual surpluses of tax income over expenditures will begin to decline in 2011 and then turn into rapidly growing deficits as the baby boom generation retires,” the report said.
Growing annual deficits are projected to exhaust Social Security reserves in 2041.
That doesn’t quite tell the whole story, as I recall, because the “Social Security reserves” aren’t actually money. They’re IOUs that the government — debt-laden, itself — is going to have to raise revenue to make whole. In other words, either taxes are going up or benefits are going down. By the time I reach the age at which this and previous generations have retired, the likelihood is that my financial stool won’t have three “wobbly legs,” but no legs at all.
And yet Singletary offers no solutions. She calls President Bush’s attempt to allow workers investment access to some of the thousands of dollars that they pay into the system “selfishness.” Social Security, she writes, “isn’t just about you.” It’s about establishing “a net that [is] in place for times like what we’re going through now.”
Actually, at times like this, the social security net resembles a trawler in shallow waters. It takes from generations with a precarious future in order to pay out to older generations that are doing and have done better financially. Personally, I’m in that teeter-totter position at which the hundreds of dollars taken from my family’s paychecks for social security would be enough to cover bills that we currently can’t pay, making it more difficult to avoid increasing an already crushing debt. Apparently, though, altruism requires that we continue to struggle, with no real prospects of retirement, so that the Baby Boomers can sit pretty in their Golden Years.