Although William Neikirk’s article “Support grows for privatizing Social Security” (Main news, April 19) did a decent job of presenting the views of both major parties, there are some important points that were omitted or ambiguous.
Rep. Mark Sanford’s (D-S.C.) point that, in the event of a severe economic downturn, the current pay-as-you-go system would be just as threatened as a privatized savings plan, needs to be embellished. The point is that in a system of private savings, this risk is transparent instead of being hidden behind the curtain of government “guarantees.” After all, in a depression, who will be available to finance deficit spending or pay tax increases? Will the Federal Reserve monetize this obligation?
An important weakness in the arguments of both the Left and Right is that the “government would control who could invest the money and make sure workers diversify their risks. Workers could not touch their money until they retire.” This “Nanny State” mentality that the hoi polloi are unable to manage their own affairs is repulsive, yet it is innate to both parties. The opposite approach should be taken. All restrictions on this money should be lifted. (In fact, all taxes on savings should be eliminated, but that is another letter.)
A person like Gerry Urick, the hairdresser quoted in the article, may opt to use her savings to open a salon, a business she could build and operate into her 60s or 70s. This would help mollify privatization critics who think it would be a “Wall Street bonanza.” A highly risk-averse person may opt to pay down his mortgage. This freedom would allow a saver to place a nest egg somewhere besides the arguably overvalued stock market. More important, it makes people freer, always a worthy end in itself.
Ideally, the ultimate goal is to get the government out of the pension business entirely. Set people free to pursue their dreams as they see fit. If, through bad luck or bad judgment, a person ends up an elderly indigent, let us help them as we help the younger poor. Why distinguish between the older poor and the younger poor? Eliminating this differentiation would be a positive return to the “rule of law” idea of treating all people similarly, although the powerful lobbies that have grown fat on this divisive approach will howl.
Ultimately, the pollyanna-ish views of some, and the doom-and-gloom views of others, are immaterial. The case for giving back some measure of our freedom is compelling enough. Freedom works. Let’s try it.
