Tuesday, March 29, 2005

The Pothole on the Rocky Road to Retirement

by The Windjammer

Most people in the work force who are above the age of forty rely heavily upon Social Security to be at least a paving block in their road to retirement. Some believe it to be the whole road.

A lot of dust has hit the air intake since President Bush in a near-echo of President Clinton’s words said that Social Security was racing down a country road toward a crisis. Those weren’t his exact words, but you’ll just have to put up with them for now and lay the misquote to my poor memory.

Somewhere along the way, several people who should have known better were trying to detour the electorate, telling us that if we would just ignore the problem for the time being, it would go away. Or at least be postponed until we can get some more nimble minds who still know how to add two and two to get four.

I have a bad habit of talking too much, but when I sort of nudged the conversations toward SS reform and then shut my mouth so my ears would stay open, I found that I learned a whole lot more. You wouldn’t believe how many ordinary folk believe that their Social Security tax is a mere 7 ½% of their paychecks. Only two of the employed included the matching funds which the employer has to chip in to cover the cost. Those who were self-employed understood the added costs perfectly, probably because the extra amount is a deductible expense. What most folks do not realize is that the employer, perhaps not on paper but certainly in his philosophy, considers the extra contribution as part of his labor cost and a part of your wages.

Social Security actually began going in the hole the day Congress passed the legislation allowing the surplus to become a part of the general funds. That was a far piece back, not something which happened during this administration, but to hear some people, you would be tempted to believe that it is all the Third George’s fault. PS: that cognomen is not meant to compare the Third George to George the Third. It just means that he is the third president in our history to be called George.

The government started grabbing money by the fistful and before you could yell "Crooks,!" the surplus had been replaced with something like one-point-seven trillion of government paper which is itself unfunded. That debt can only be paid by taxpayers somewhere down the road, or, heaven forbid, by borrowing some of the money we have sent to the foreign countries whose economies were faltering. Some of those recipients were really better off financially than the U.S. (if you include in your consideration the National Debt, which is not the same thing as the National Deficit), but we helped them anyway.

I have no idea how much a billion dollars is, but someone once told me that according to the way we compute in this country, a trillion is equal to a thousand of the small change. Figures vary on how many of the latter will be required to pay for Social Security (in today’s dollars--inflation could turn the figure into something too big to print), but the trustees have recently projected a long-tem figure of 11.1 trillion of those little green things which you use to buy diapers for the younguns.

President Bush understands that something must be done if Social Security is to be available to many of those who are paying for it now. So did Bill Clinton. So does everybody else in Congress and in the bureaucracy who has anything to do with it. Politics may make a few strange bedfellows, but it also makes some who try to steal all the blankets.

I am living on borrowed time and on other peoples’ money. I hope my grandkids can do the same when they become old and feeble.

I hope yours can too.

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