Friday, February 18, 2005
The quote in question is:
In the important field of security for our old people, it seems necessary to adopt three principles: First, non-contributory old-age pensions for those who are now too old to build up their own insurance. It is, of course, clear that for perhaps thirty years to come funds will have to be provided by the States and the Federal Government to meet these pensions. Second, compulsory contributory annuities which in time will establish a self-supporting system for those now young and for future generations. Third, voluntary contributory annuities by which individual initiative can increase the annual amounts received in old age. It is proposed that the Federal Government assume one-half of the cost of the old-age pension plan, which ought ultimately to be supplanted by self-supporting annuity plans.This specifically outlines a three-part program, which I summarize as follows:
- "non-contributory old-age pensions for those who are now too old to build up their own insurance": I read this to mean "tax today's wage earners to pay for today's retirees."
- "compulsory contributory annuities": I read this to mean the government forces you to save for your retirement.
- "voluntary contributory annuities": I read this to mean the government facilitates individuals to be able to save more, if they want.
The other intellectually troubling part most Democrats pass by like a Brahmin ignoring an untouchable is that Social Security as we "know and love it" represents the only leg of the triad for which FDR envisioned a twilight. The idea of paying for today's retirees by today's workers is explicitly expressed as a necessary evil for "perhaps thirty years" until annuities of the then current workers had built up to a self-sustaining level. Of course, when Congress failed to institute and protect individual annuities they, of course, never built up to a self-sustaining level. Besides, once Congress got their hands on the Social Security teat did anyone seriously believe they would on their own retire the tax? Additional Social Security entitlements enacted in LBJ's "Great Society" further damned ever pushing this slobbering baboon off the taxpayers' collective backs.
Maybe I'm slow on the take, but perhaps the real danger some traditional Social Security advocates see is that once individual annuities are part of the system and workers can see the real return for their own money in their own account they may start questioning why they're still paying the rest instead of investing it as well.