The Social Security system needs to be retired.
For the sake of brevity, I will address two of the lesser-known arguments against Social Security.
Justice is a core American value that we give lip service to every time we recite the Pledge of Allegiance. What a shame then that justice is completely ignored when Social Security distributes benefits.
According to the White House’s Office of Management and Budget, Social Security accounts for 21 percent of the government’s spending this year which equates to roughly half a trillion dollars.
This means that half a trillion dollars per year are distributed unfairly. The problem with Social Security is that everyone starts receiving benefits at the same age, but some groups of people die earlier than others.
According to the Department of Health and Human Services, a white female born in 1990 can expect to live 79.4 years, while a black male can expect to live 64.5 years.
With the retirement age for Social Security being 67, the average black man born in 1990 will, on average, die more than two years before he is eligible to retire while the average white woman will get over 12 years of benefits.
However, both the man who may never see a single check and the woman who gets a decade of benefits face the same level of tax burden throughout their lives.
Besides being unfair to groups of people who on average die young, such as men, minorities and homosexuals, Social Security finds other ways to discriminate.
The other main group the system discriminates against is single people.
Single people have no chance of getting survivor benefits that married people can get if they outlive their spouse. Therefore the widowed housewife of a well-paid spouse will receive more Social Security benefits than a single person who worked for low wages.
People who divorce face a bizarre arbitrary standard for getting survivor benefits from Social Security.
If a marriage lasts nine years and 364 days or less, the spouses get no survivor benefits. However, the day the marriage enters its tenth year, they become entitled to full survivor benefits.
This, according to the book The Coming Generational Storm, leads to the absurd situation where people wait to divorce until the day of their 10th wedding anniversary.
In case all this wasn’t bad enough, Social Security faces another problem. For the people lucky enough to live to 67 and receive benefits, Social Security is a really poor investment.
According to a comprehensive study from the National Center for Policy Analysis, money that is “invested” in Social Security earns a less than two percent real rate of interest each year.
I’ve dabbled enough in investing to tell you that just about any investment other than hiding your money under a mattress will produce better returns than two percent. A conservative diversified portfolio can make at least triple that much.
Some people say we should reform rather than abolish the system. However, I don’t trust a government that can’t catch Osama bin Laden, provide timely emergency aid to Katrina victims or even deliver the mail on time to do any better with my retirement. For all we know, reform could make the bad situation even worse.
It’s time to phase out the woefully underfunded and discriminatory Social Security system. We should pay all our obligations to current retirees and then gradually reduce benefits for people nearing retirement age.
We should eliminate the Social Security payroll tax and be responsible for our own retirement planning aided by the windfall we’d receive from that tax cut. We would have more money for retirement and we would own our retirement funds rather than trusting an insolvent national government to pay us.
Ian Bezek is a sophomore economics major. His column appears occasionally in the Collegian. Letters and feedback can be sent to email@example.com.