Put an end to Social Security

Social Security commonly is portrayed as benefiting most, if not all, Americans by providing them "risk-free" financial security in old age. This is a fraud, charges the Ayn Rand Institute, Irvine, Calif.

Under Social Security, lower-and middle-class individuals are forced to pay a significant portion of their income--approximately 12%--for the alleged purpose of securing their retirement. That money is not saved or invested, but transferred directly to the program's current beneficiaries--with the "promise" that, when current taxpayers get old, the income of future taxpayers will be transferred to them. Since this scheme creates no wealth, any benefits one person receives in excess of his or her payments necessarily come at the expense of others.

Under Social Security, every aspect of the government's promise to provide financial security is at the mercy of political whim. The government can change how much of a person's money it takes--it has increased payroll taxes 17 times since 1935. The government can spend a person's money on anything it wants--observe the Iongtime practice of using any annual Social Security surplus on other entitlement programs. The government can alter when (and therefore, if) it chooses to pay someone benefits and how much they consist of--witness the current proposals to raise the age cutoff or lower future benefits. Under Social Security, whether an individual gets twice as much from others as was taken from him or her, or half as much, or nothing at all, is entirely at the discretion of politicians. A citizen cannot count on Social Security for anything--except a massive drain on his or her income.

If Social Security did not exist--if taxpayers were free to use that 12% of their income as they chose--the ability to better their future would be incomparably greater. People could save for retirement with a diversified, long-term, productive investment in stocks or bonds--or they reasonably could choose not to devote all 12% to retirement. They might decide to work far past the age of 65. They might opt to live more comfortably when young and more modestly in old age. They even might choose to invest in their own productivity through additional education or starting a business.

How much, when, and in what form one should provide for retirement is highly individual--and is properly left to the individual's free judgment and action. Yet, Social Security's advocates continue to push it as moral. Why? The answer lies in the program's ideal of "universal coverage." the concept that, as a New York Times editorial preached, "all old people must have the dignity of financial security"--regardless of how irresponsibly they have acted. On this premise, since some would not save adequately on their own, everyone must be forced into some sort of "guaranteed" collective plan--no matter how irrational. Observe that Social Security's wholesale harm to those who would use their income responsibly is justified in the name of those who would not. The rational and responsible are shackled and throttled for the sake of the irrational and irresponsible.

Those who wish to devote their wealth to saving the irresponsible from the consequences of their own actions should be free to do so through private charity, but to loot the savings of untold millions of innocent, responsible, hard-working young people in the name of such a goal is a monstrous injustice.

Social Security in any form is morally irredeemable. We should be debating net how to save Social Security but how to end it--how to phase it out so as to best protect the rights of those who have paid into it as well as those who are forced to pay for it today. This will be a painful task. However, it will make possible a world in which Americans enjoy far greater freedom to secure their own futures, concludes the Institute.

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