Why Social Security is Unsustainable
Liberal politicians continually push for ever-larger entitlement programs. Free college, Medicare for all, a Universal Basic Income, expanded Social Security, etc. When pressed into whether or not they think that those programs will be effective, they are quick to say yes. Often, they give a reply that at least mentions Social Security and how “effective” it has been. What they conveniently leave out is that Social Security is unsustainable; we can’t even pay for the entitlement system we currently have.
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One look at the finances of the United States would show that not only is Social Security unsustainable, but we can’t afford any of the current entitlement programs we have. Taxes are already too high (even with the Trump tax cuts) and the national debt is out of control. The government is spending about as much money as it can conceivably take in or borrow and spend; we need to recognize that and demand no new entitlements.
If we don’t do so, the monetary problems could be tremendous. Without a gold standard, our money is worthless other than the fact that it’s currently a large world foreign currency reserve. But, given our current Cold War with China and the potential that record-low interest rates could go up, that might not even be the case, which would make the idea that Social Security is unsustainable even more true in the future.
Furthermore, if other countries start recognizing that the American national debt is a huge problem that’s skyrocketing, not slowing down, then that foreign currency reserve status could be lost, leading to inflation and misery. And if taxes such as the death tax are raised, then capital will flee the country and destroy the currently booming economy.
In a reasonable political climate, that overspending problem would be recognized and rectified by our representatives. Just read The History of the United States during the Administration of Thomas Jefferson; even when it looked like war with England could break out and we were engaged in a spat with the Tripoli pirates, Jefferson managed to focus on cutting the national debt! Now we can’t even balance the national budget!
The reason for that is that Social Security is unsustainable, as is every other entitlement program. Those programs are unsustainable because they were designed for a different time and mindset. They are premised on the idea that people would rather work than take a government handout. And if past American generations, that was true. The Republic for Which It Stands is a testament to that.
Nowadays, however, that is not the case. Welfare queens take far more than they will ever contribute and the population is aging rapidly. Furthermore, our disastrous wars for democracy in the Middle East have overtaxed the treasury. It’s time to reign in our ambitions, both in terms of foreign policy and entitlement programs, and start spending less money. Otherwise, the consequences could be disastrous for America. When it comes to paying for promised entitlement programs, the government has been “robbing Peter to pay Paul.” That flawed and unjust policy needs to stop, not only is it unsustainable, it’s also evil.
It’s evil because it’s yet another step on the road towards socialism, which will make us all equally poor. Mass handouts, such as those delivered from Social Security, are a form of socialism. Yes, I know people “buy into” the program through the payroll tax. But that’s not enough, we also need a growing population and increased revenues, and for people to not live as long or take Social Security for as long. However, as of now, people are living longer, so they take more in Social Security payments. That is why it’s true that Social Security is unsustainable. Too much is being paid out and not enough is coming in. That’s why Social Security is unsustainable.
So, what is the solution to bring America back from the brink of socialism and avoid dealing with the societal upheaval that would come once the general public realizes that Social Security is unsustainable and has to deal with that problem?
Well, in Free Market Revolution, Don Watkins and Yaron Brook recommend phasing out and getting rid of Social Security, with the fund for it being paid back over time. It could then be replaced with a system that provides enhanced tax benefits for those that invest to avoid the coming retirement crisis. Niall Ferguson described how a similar program worked in Argentina in his The Ascent of Money.
To be honest, I agree with them. I think a solution such as that is the only way out of this Social Security mess that we’ve found ourselves in. If we don’t wake up now to the fact that Social Security is unsustainable and work to correct that problem, then we’ll soon find that the hole is way too deep and we’re still digging. Free markets are the solution. Let’s use them to get out of this entitlements mess.