Social Distortion

In the old days no one worried about whether they had enough money for retirement. This is because, in the old days, no one ever really retired. You kept hunting woolly mammoths until you couldn't run after them any more, and then you probably ended up getting left behind when you couldn't walk any more. Sure, maybe your clan appreciated your wisdom about which fruits and berries were poisonous, or your knowledge of the movement of the herds, but come on, it's not like they had the resources to take care of you when you were too doddering even to feed yourself. They were all trying to stay alive long enough to have babies. Such was life.

Not that most people lived long enough to become doddering. You were pretty likely to end up tiger food before you even got a grey hair, in those days. But, over the centuries, we've worked hard with our opposable thumbs to create a civilization that keeps us alive longer, often waaaaay into the doddering phase. This progression has been good, overall, despite the occasional unfortunate side effect of thermonuclear war or the bubonic plague. But it's left us with all these old people, plus the equally unfortunate modernity side effect known as compassion. The law of the jungle got replaced a long time ago.

So the old system was eventually replaced by old people moving in with their children, which worked okay. But if the old people didn't have any children, or if their children were too poor or jerks, the old people became charity cases. During the Great Depression, when many, many people were too poor even to feed themselves, let alone a grandparent, Franklin Roosevelt and his ilk came up with the idea of Social Security. Old people now got money straight from the government, without having to worry if little Tommy would grow up to have a good enough job to feed them.

As it turned out, giving old people regular monthly checks was a very popular thing to do. It didn't matter if you were rich or poor in your working life; it didn't matter if you started a family or not. It didn't even matter, financially, if your kids turned out to be jerks who wouldn't support you. No matter what, the money was going to be there.

This is where we stand today.

Now, we're not talking about a lot of money per person. However, thanks to advances in medicine, people are living longer these days. This means that more and more people are drawing money for longer and longer. Social Security is the biggest part of the budget there is.

This causes problems, because the way we can afford to send old people checks in the mail is by taxing the wages of people who are currently in the workforce. And taxes are just as unpopular as regular monthly checks in the mail are popular.

The political and economic thinker Michael Lind has suggested, in a version of an idea that has many followers these days, that we change this system; instead of having the current workforce subsidize the current retirees, everyone should subsidize him or herself. This idea has an undeniable appeal; wouldn't you rather pay your own way than let someone else pay for you? Wouldn't you rather pay for yourself than someone else? It seems fairer, and would have the added benefit of making sure the system never runs out of money, because, if everyone is paying for themself, it won't matter if the population shrinks or grows over the generations. Sure, some people are never able to work, but the vast majority of people have jobs; the few who don't could be taken care of in other ways.

Unfortunately, the idea on the table currently is "privatization" or "personal accounts" or whatever. What happened is this: the President and the people he works with heard this idea of making everyone pay their own way and thought, Great! Let's do it! And while, we're at it, why not have private investment firms administer the funds, too? That way, we'll get the government out of the pension business.

But, as it turned out, the idea of every worker paying his or her own way sort of got pushed aside by the idea that private investment firms should administer the accounts. No one seems to know exactly how this happened, but this is all we've got left. The current workforce will continue to subsidize the current retirees. And, if the President gets his way, we'll have these extra funds administered by private investment firms. Who of course will charge a reasonable fee.

The President's idea hasn't turned out to be all that popular. Why? Well, old people can be impatient. They like direct talk. The President came over to their house, jack in hand, and said, Hey, your tire's flat. They said, Oh, thanks, I didn't notice. Could you fix that for me? I'll pay you. The President says, Wait, I've got a better idea. Wouldn't you like to buy some new hubcaps? The old people say, Huh? You just said my tire's flat, now you want to talk about hubcaps? But the President just keeps smiling and talking about hubcaps.

Is it any wonder that so many people wonder if their tire is really flat at all?