No Easy Way Out

Fixing Social Security can't be painless.

John Attarian from the July 1996 issue

(Page 3 of 3)

Our best course is to accept the inevitable suffering and treat it as the price of buying back our freedom. Liberate the baby boomers and post-baby boomers--those born from 1945 on--from Social Security taxes in exchange for their renouncing all benefits. They would be responsible for their retirement and, if they wish, they could invest their erstwhile payroll taxes in tax-free IRAs. Their share of the necessary suffering will be to see the payroll taxes they've already paid for what they really are-- transfers to today's elderly--and to forget about "getting their money back," or any benefits at all. But they would finally be free to manage their money their way, which is how it should have been all along.

As for current retirees and workers soon to retire, complete benefit termination is politically impossible--and after lying to them for decades the government is obligated to deliver something. But there is no legal or moral right to full current-law benefits, either. Retirees' share in the necessary suffering will be substantial benefit cuts. Benefits should suffice only to keep a retiree decently above poverty. They should be rigorously means- tested: The Clark Cliffords of America have no right to the earnings of struggling single mothers bagging groceries. Such bare-bones benefits should be financed from directed general revenue, perhaps a temporary national sales tax. As the beneficiary population disappears, the tax would be reduced accordingly, until it too disappears.

To make this admittedly hard step as bearable for the elderly as possible, all benefit taxation, retirement earnings limitations, and taxes on retirement income from all sources should be abolished. Retirees could earn all they want and keep all of it--a long stride toward true economic liberty.

And if retirees' savings, earnings, and minimal benefits won't amount to much? Then let their children help them. That's what children are for. That's what "family values" mean. We could give a tax credit for supporting elderly parents, but it is odious to bribe people into doing the duty that family membership commands.

I will not insult my readers' intelligence by pretending that this will be easy, fun, or painless. It won't be. But it will be honest. Current retirees who genuinely needed benefits would get something--not much, but something. Taxpayers would be liberated. And by the time baby boomers retire, Social Security would be gone--without taking America with it.