Reforming Social Security

March 2005 -- Many people seem to sense it. The debate over whether to reform Social Security by allowing individuals to divert some of their payments into personal retirement accounts reflects a much deeper battle, one literally for the soul of the Republic. It pits those who would take the first small steps in restoring the morality necessary to sustain a free society against those who have undermined that ethos and who would perpetuate a system of servitude.

To appreciate the nature of the battle it's necessary to recognize that true individualists, like the ones who created this country, are autonomous and independent. What does that mean? It means that they pursue their own goals in life by right, not by permission of "society," their neighbors, or elected officials—indeed, the purpose of government is to protect their lives, liberty, and property. It means that they rely on their own efforts to secure the means to their material survival. They don't beg government bureaucrats for alms or kiss the feet of feudal lords for handouts. Rather, through their own efforts they produce goods and services that they exchange with willing customers based on mutual consent. They are independent individuals in control of their own lives, dealing freely with one another.

Further, they take pride in earning their own keep, in providing for their own needs—a house, recreation, education for their children, medical care, and a comfortable retirement. And they take pride most of all in their self-made moral character—their rationality, integrity, honesty, fortitude, sense of justice—that allows them to create that wealth.

Does this description fit most Americans today? Social Security, a pillar of the welfare state, is a principal policy undermining that individualist ethos. Of course, it didn't start that way. Established in the midst of the Depression, Social Security was not meant to be the primary source of income for retired Americans. Rather, it was supposed to supplement the savings of poorer individuals and make certain that the poorest senior citizens did not find themselves literally destitute on the streets. But it was assumed that most Americans would save for their retirement. And, of course, with sixteen workers per retiree and most Americans living only into their sixties at that time, the program hardly seemed a threat to the federal budget or individual liberty. But it has become both.

Much has been written about Americans now living, on average, into their mid- to late seventies and the current ratio of three workers—soon to be only two—to each retiree. That's what has caused the budget crisis. But worse has been Social Security's assault on the morality of individualism.

Over the decades, politicians have purchased public favor by extending more benefits to more individuals, lulling many citizens into a false sense of security and removing their incentive to take care for their own Golden Years. Lower-income Americans especially were harmed by the Social Security tax because it took that marginal income that they might otherwise have saved or invested for themselves. The result: too many Americans who have retired or will retire soon did not take steps to provide for themselves much beyond the government system. Now these individuals find themselves at the mercy of politicians for their material well-being.

Thus, many Americans now are blind to concerns about the future of the Social Security system out of fear that politicians might cut their benefits in the process of reforming the system. They are no longer independent adults in control of their own fates.

While many Americans regret this situation, others have allowed their moral ideas and character to be conditioned by this perverse paternalistic system. Many not only see themselves as entitled to some compensation from a government that has been taking their money during their working lives, but also see government—read, their fellow taxpayers—as fundamentally responsible for taking care of them in their old age in some way, shape, or form. They no longer accept the moral ideals of autonomy and independence. They have tied themselves to others and to political masters.

Worse, others manifest the moral decay of whining, resentful beggars who hold out their infantile lack of desire to run their lives as a moral argument for guaranteeing them a retirement income and much more. That is the product of seven decades of the welfare state: servile subjects rather than proud, responsible citizens. And what is truly disgusting is that the politicians who have inflicted this system on us pose as the lovers and benefactors of the elderly.

Many supporters of personal retirement accounts understand this moral mess of the current system but, whether through true conviction or fear of scaring citizens, do not argue for eventually phasing out Social Security altogether and setting citizens free of government. Rather, they speak of saving the system and guaranteeing a comfortable retirement though through a market-based accounts rather than a government Ponzi scheme.

But it is time for those who support freedom to take the moral high ground. It is time to say shame on the condescending by paternalist politicians of American citizens; shame on their attempts to keep citizens bound to political elites; and shame on those citizens who allow themselves to be seduced by these politicians rather than seek ways to restore their independence.

The economic arguments for personal retirement accounts are sound. But a sound moral vision is also necessary, not only to win the current battle, but also to restore the individualist morality in the hearts and minds of Americans that is necessary for the preservation of a free society.

‍