Social Security Follies

The Washington Post, official voice of the Democratic Party, weighs in on Social Security, in an article titled “Poorest Face Most Risk on Social Security”. The Post tracked down a poster child for the welfare state:

No group of Americans would be affected more by President Bush’s Social Security plan than those earning the least. Just ask 46-year-old Brent Allen. Allen, who recently lost his job at a Massachusetts paper mill, faces a retirement financed exclusively by the money he has been paying into the Social Security system for the better part of 30 years. Like nearly half the U.S. population, he has no pension or savings to speak of. And his brief flirtations with the stock market have largely flopped.
So Allen, who lives on less than $15,000 a year in disability payments from Social Security and income from his live-in girlfriend, is distrustful of Bush’s plan to allow workers to divert a portion of their payroll taxes into personal investment accounts.

Well, Brent, I can sympathize: I’m one of the worst investors in the history of the world, and every decision I make about stocks turns out to be wrong. But, you know what? I still do far better saving for myself than I could ever do through Social Security. But that’s OK, because the one fact that the Post somehow avoids mentioning is that the Bush administration’s private account plan is entirely voluntary. That’s right: If you’re convinced that every investment you will ever make, no matter how conservative, will somehow turn out worse than burying cash in your back yard, not to worry: you can stay with the good old, impossibly lame, Social Security program forever.
How can the Post write a long article on proposed Social Security reforms without mentioning this basic fact? Beats me. Ask them.
UPDATE: Several readers have pointed out that, in its next to the last paragraph, the article does quote a White House official saying that “‘no one is exposed to risk that does not want any risk’ because the program is voluntary.” But the rest of the article is premised on the idea that workers will be forced to assume risk; otherwise, for example, what is the point of the “Brent Allen” anecdote, which concludes:

“There is no guarantee [Bush] can make. There is a guarantee now,” under the current system.


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