There are an awful lot of people in my generation — myself included — who wonder not just about the long-term viability of Social Security, but also about it’s effectiveness. In the early years of its existence, it was a wonderful program; but these days a Social Security check is barely enough to feed someone, much less pay for housing and medical care.
So when I read this in today’s Washington Post, it made me feel that perhaps the time has come for the abolition of Social Security completely; it is threatening to become a very, very expensive program that does no one any good:
The Bush administration has signaled that it will propose changing the formula that sets initial Social Security benefit levels, cutting promised benefits by nearly a third in the coming decades, according to several Republicans close to the White House.
Under the proposal, the first-year benefits for retirees would be calculated using inflation rates rather than the rise in wages over a worker’s lifetime. Because wages tend to rise considerably faster than inflation, the new formula would stunt the growth of benefits, slowly at first but more quickly by the middle of the century. The White House hopes that some, if not all, of those benefit cuts would be made up by gains in newly created personal investment accounts that would harness returns on stocks and bonds.
… “This is going to be very much like sticking your hand in a wasp nest,” said David C. John, a Social Security analyst at the conservative Heritage Foundation and an ally of the president. “And the reaction will be similar.”
… The change would save trillions of dollars in scheduled expenditures and solve Social Security’s long-term deficit, but at a cost. According to the Social Security Administration’s chief actuary, a middle-class worker retiring in 2022 would see guaranteed benefits cut by 9.9 percent. By 2042, average monthly benefits for middle- and high-income workers would fall by more than a quarter. A retiree in 2075 would receive 54 percent of the benefit now promised.
Of course it would be fiscally proudent to cut benefits. But when the current benefits are so paltry when compared with the actual cost of living, cutting them is ridiculous, and makes the entire system so pointless that it’s not worth paying out anything at all. At least, that’s what my unique brand of logic tells me.
