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Why Does the Government Patronize Us? Great op-ed on social security privatization
Wall Street Journal ^ | November 11, 2004 | EDWARD C. PRESCOTT

Posted on 11/11/2004 7:34:45 AM PST by laissez- faire

Why Does the Government Patronize Us?

By EDWARD C. PRESCOTT November 11, 2004; Page A16

Radicalism: The conservatism of tomorrow injected into the affairs of today.

--Ambrose Bierce, "The Devil's Dictionary."

Of all the economic issues facing Washington these days, one looms larger and larger as more time passes without a solution -- how to fund our Social Security obligations. We often hear that the main problem is our aging demographics or the political games that are played with Social Security funds. While these may be problematic issues, they are only symptomatic of the fundamental predicament: Government has made promises that it can't keep.

Heretofore, the government's solution has always been to make more promises: "Don't worry. We'll figure something out. You'll get your Social Security payments. Trust us." But to savvy citizens these are starting to sound like pie-crust promises: Easy to make and easy to break. Indeed, Social Security benefit payments are projected to exceed payroll tax revenue in the year 2018, with Social Security trust fund depletion to occur in 2042. I would hate to be a politician in office when that pie crust breaks.

Further, about two dozen countries have reformed their state-run retirement programs, including Chile, Sweden, Australia, Peru, the U.K., Kazakhstan, China, Croatia and Poland. If citizens in these countries can handle individual savings accounts, especially citizens in countries without a history of financial freedom, then U.S. citizens should be equally adept.

(Excerpt) Read more at ...

TOPICS: Business/Economy; Government
KEYWORDS: privatization; socialsecurity
This is an excellent analysis of social security privatization. This is one "mandate" that I hope Pres Bush pursues aggressively.
1 posted on 11/11/2004 7:34:45 AM PST by laissez- faire
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To: laissez- faire

I hope he pursues it as well, although his current focus seems to inexplicably be on his amnesty plan.

2 posted on 11/11/2004 7:59:55 AM PST by Akira (Experience is a hard teacher, but fools will have no other.)
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To: laissez- faire

First, we can cut the "we" and "our" business. Social security obligations were made by swindlers who are now dead. I had nothing to do with it.

The initial beneficiaries of this Charles Ponzi scheme of course did quite well while there was a swelling workforce. Now that population growth is plateauing, as it has in Europe, the scheme cannot work. The result: each worker will be forced to support himself as well as some other person. That is, taxes will be such earning just as much, you will live half as well.

And since working age people are generally struggling, while retirees are generally quite affluent, you will have a situation where the government is stealing from the poor to give to the rich. Young struggling people will only look forward to the day when they can stop slaving and start living themselves at someone else's expense.

Because of the huge confiscations made, there is no political choice but to pay off the victims of this larceny. There is NO solution that won't have enormous costs. But, the longer we wait, the greater the costs. We can thank FDR and his New Deal cronies for this 2000 pound gorilla. And you can't tell me that the great Professer Keynes wasn't aware of this Ponzi scheme (especially since the celebrated Charles Ponzi himself was revealed some 15 years earlier).

The gov must therefore buy off the system. Pay off all those from whom it has stolen, and stop the larceny now. It will cost us all in taxes, and that is not fair, but there is no fair solution, and the unfairness will only get worse the longer Uncle Sam waits.

Thank you, FDR, for winning WWII. If you hadn't, you'd go down as the worst President this country ever had.

And God save us from future crooks who implement such schemes, knowing that they won't be discovered until after they are long dead, and unavailable to receive the punishment they deserve.

3 posted on 11/11/2004 8:03:22 AM PST by beavus
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