May 30, 2016 by Anders Ingemarson
This is the first in an multi-part series titled “The Ostrich Chronicles.” We will cover a variety of issues where our individual rights are clearly being violated or threatened, but where Americans in general, and our elected officials in particular, tend to bury their heads in the sand instead of taking corrective action.
In fairness to the ostrich, burying the head in the sand is not one of its habits. But we hope the majestic bird is excusing our use of the evocative image to illustrate the shortcomings of women and men.
We will take a two-pronged approach: first we will get the practical side out of the way by illustrating that most of these issues are not that hard to fix if only the will-power is there; separating state and the economy is neither brain-surgery nor rocket science. Secondly, we will offer a few thoughts on how to get to pull ones head out of the sand, face the moral injustices and individual rights violations of the current system, and start doing something about them.
First out is Social Security.
On paper reforming Social Security is not that hard a nut to crack. As we have outlined in “Separation of State and Retirement” the following three actions would put us on the path towards returning control of planning and saving for retirement to individual Americans in relatively short order:
- Increase the retirement age for instance 1 year every 3 years until reaching the average life expectancy of Americans (currently around 78-79 years). Today’s 67 would become 68 in three years, 69 in six years, etc. Same for ranges of early/late retirement options: 62/70 would become 63/71 in three years, 64/72 in six years, and so on. If you’re 59 today, you’d have to wait until age 71 to collect in full, instead of age 67. If you’re 50 today, you’d have to wait until shortly before age 75.
- Reduce benefits from a certain cutoff date, allowing everybody who is for example 50 and above to collect in full once reaching the retirement age as calculated above. For everybody younger than 50 reduce benefits with let us say 2.5% per year. If you’re 49 at the cutoff date, you’ll collect 97.5% when reaching full retirement age, if age 48 95%, if 40 75%, etc. That will allow for plenty of time to save up for retirement for those younger than 50.
- Reduce Social Security taxes gradually to zero after all current liabilities have been funded (assuming the above gradual dismantling).
Combine the above with increased tax deductions for retirement savings and regulatory rollback and we would soon be on track towards total separation of state and retirement. If you think the math doesn’t add up, then make the retirement age increase and/or benefit reductions more or less aggressive.
What will it take to gain traction on liberating us from the shackles of government retirement control? The answer is a sea change in moral sentiment. For the past some 80 years, champions of Social Security have occupied the moral high ground with vague promises of financial security for everyone in old age. But a system that robs Peter to pay Paul is both morally and practically fraudulent.
For example, if you are currently collecting Social Security consider the following:
- There is no “Social Security trust fund”; the system is “pay-as-you-go.” The funds you and your employers paid into the system your entire working career went to paying for the retirement of your parents’ and grand-parents’ generations. In fact, the program got off the ground in the first place in no small part due to a Supreme Court case (Helvering v. Davis, 301 U.S. 619 (1937)) that upheld the program because “The proceeds of both [employee and employer] taxes are to be paid into the Treasury like internal-revenue taxes generally, and are not earmarked in any way’. That is, the Social Security Tax was constitutional as a mere exercise of Congress’s general taxation powers.”  So while the scheme hasn’t exactly been secret, it should make you no less indignant.
- That no money is in the “bank” (the Treasury) means that you are a welfare case; there is unfortunately no other way of putting it. You are at the mercy of the people who continue to pay into the system and grant you a monthly handout. The only thing separating you from the person with the food stamps in front of you at the supermarket, and from a crushing blow to your self-esteem, is the government depositing your welfare check directly into your checking account giving you a false sense of independence.
- If this makes you feel morally uneasy (this doesn’t seem right, does it?) or outraged (this is wrong!) or anything in between, you are now part of the change in moral sentiment that is a prerequisite for reform. You may be depending on the current Ponzi scheme for the rest of your life, but don’t you owe yourself a fight for reforming the system to give your children and grandchildren the opportunity to live independently off their own savings in retirement, without being at the mercy of their fellow men and the heavy hand of government?
What if you are not yet collecting Social Security? The fact that you and your employer are paying a combined 12.4% welfare flat tax to finance other people’s retirement needs and not your own should make you feel morally betrayed; absent a change you will be a welfare case just like today’s retirees—if there is any money left to dole out when your time comes to collect. So much for a “Golden Age.” Do you think this is a moral travesty? Congratulations, you just added a ripple to the moral sea change we’re talking about.
The time is ripe for retaking the moral high ground for individual rights-respecting retirement independence. Pull your head out of the sand and start fighting the moral injustices of the current system. And force your elected representatives’ heads out of the ground as well. Fight for your individual right to plan and save for retirement and to reap the fruits of your labors in the later parts of your life without government interference. With just an ounce of moral conviction on your part, you will find that the enemy’s hollow defenses will come tumbling down.