Personal Responsibility – Your Savings for Your Retirement Years

E-Newsletter No. 44 ______August 2017

It has been a few months since we last discussed Social Security, so our Editorial Board thought that this would be a good month to re-visit this issue. We do this for three reasons.

Our elected representatives will soon be returning to Washington DC from their August break, to vote on increasing the federal government’s so-called “debt limit” (which has become a farce that is increasingly irrelevant and meaningless).

They will also be trying to put the finishing touches on our federal government’s fiscal 2018 budget for the year that begins on October 1st. All of the projections show that this budget will not “balance”, and therefore over the course of the upcoming year, there will continue to be an increase in the total debt of the federal government.

But most importantly, we want to point out the fact that very few of our elected representatives are brave enough to address the issue of entitlement reform. They do not want to come forward with a solution to this problem, because they are worried about what effect this would have on their next re-election. Currently, approximately 70% of the federal government’s spending is on automatic pilot for “mandatory” spending…. Mandatory?? How did we ever get into this mess? The answer is very simple – – Many years ago “progressive” politicians (including FDR) decided that retirement funds should become the responsibility of the federal government (instead of being a Personal Responsibility). And then in the 1960s, another career politician (LBJ) along with other Socialists of the Left added Medicare, Medicaid and various welfare programs to the list.

In The 2020 Initiative, our Editorial Board puts forward our thoughts on how Social Security can be transformed over a multi-year transition period into a means-tested welfare benefit. As we have noted previously, there is no money in the Social Security “Trust” (which is another misleading federal government charade). But even though we believe it is immoral for the federal government to continue to steal funds from future generations to make Social Security payments to other people, we are “somewhat OK” with the idea of a means-tested welfare benefit for an elderly retired citizen who is in need of financial assistance. We acknowledge the possibility that due to an individual’s facts and circumstances, they might not have been able to personally save enough funds that would have allowed them to cover their own needs over the course of their retirement years. In that type of situation, our first choice would normally be to have civil society (families, supported by Not For Profit charities and other local social services agencies) provide this kind of assistance to such an individual, but maybe it’s OK for the federal government to provide for such a means-tested welfare benefit.

Having said that…. Our country’s citizens need to begin to acknowledge that even this kind of means-tested welfare benefit is not a proper role of the federal government. And unfortunately, the payments that are currently being made under this program do not make any sense – – the vast majority of these “unfunded pension benefits” are being paid to retirees who are probably already financially secure, and only minimal monthly amounts are being paid to retirees who probably need to receive a Social Security benefit (see the July 2015 letter to Senator Bernie Sanders on our Foundation’s website).

In its current form, this government program is unsustainable. As the program’s Trustees have reported for the past several years, “Lawmakers should address the projected trust fund shortfalls in a timely way in order to phase in necessary changes gradually and give workers and beneficiaries time to adjust to them.” Congress, are you listening? We are extremely disappointed that we hear this “standard” wording in the Trustees’ report year after year after year. Maybe (soon?) our elected officials will finally take the steps that are needed to fundamentally transform this failing government program. Our proposed transition plan would not change any benefits to retirees who are currently receiving Social Security payments. It would also allow current workers to get their personal contributions back out of the Social Security program, plus interest. But after that, the federal government would no longer be able to coercively tax future generations for unfunded promises that were made in the past. Unless these fundamental changes occur (soon), it is going to be extremely difficult for future generations to save for their own retirement years.

US Debt Clock – – July 1st – $61,368 per citizen / August 1st – $61,344

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