Cato Institute: “A Real Lockbox for Social Security”

Here’s some interesting commentary from Michael D. Tanner over at the Cato Institute.

Though Tanner wrote this in 2005, much of what he says regarding the state of Social Security is still true–if not truer–12 years later:

“As we know by now, Social Security is facing many problems that will require long-term, comprehensive reform. But before a doctor operates on a patient, the first step is to stop the bleeding. And the first step toward Social Security reform should be to stop Congress from spending Social Security money on anything except workers’ retirement.”

Unfortunately over a decade later, we remain in the same position. The Social Security Board of Trustees holds steadfastly to its estimated Trust Fund insolvency date of 2034.

Though experts have long warned policymakers to push the pedal to the floor on Social Security, we’re still waiting for them to acknowledge this issue seriously let alone pass meaningful reform legislation.

And if the clock was ticking in 2005, the sound of the hands should be deafening in 2017.

And still, we’re being asked to focus on a list of demographic challenges–like, longer lives, an aging population, a lack of personal saving, low wages, and rising cost of living—instead of one glaringly big problem.

Don’t get us wrong, all of these challenges complicate Social Security’s job, and each one deserves a closer look as we develop legislation to shore up the program. But to borrow Tanner’s comparison, this is more like identifying and eliminating risk factors to create a successful long-term treatment.

But what we need to do is stop the life threatening bleeding now.

According to Tanner, this means taking Social Security income out of Congress’ hands and putting it back into workers’ pockets.

And while for Tanner, this is done in the form of privatized worker-owned and controlled retirement accounts, the sentiment behind the idea is something even opponents of privatization can agree with:

“Congress treats that money like its own: free to spend on whatever the members choose. …It’s the ultimate insult. Congress spends our Social Security taxes then expects us to pay more taxes to repay its borrowing.”

To save the life of Social Security, we have to stop the bleeding first. And the bleeding comes from our retirement money being thrown at everything but retirement.

Whether you support a traditional Social Security system or a privatized system, one thing is very clear: it’s time for a lockbox for Social Security.

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