The first guest post comes from commentator here (and elsewhere) Greg G. Greg and I first crossed paths over at Mark Perry’s blog Carpe Diem. Greg struck me right away with his unwavering politeness, even in the face of harsh opposition. He’s long been one of the most fair people I’ve ever had the pleasure to interact with. Even when we disagree, he gives everyone the benefit of the doubt. He holds his ground, to be sure, but he doesn’t discount anything. Without further ado, here is Greg:
If You Hate Government Enough…
If you hate government enough, its successes just might bother you more than its failures. Social Security is one of the most successful and popular programs in the history of government. And yet, a lot of self-described libertarians object to it for a lot of different reasons.
Some object to it on the grounds that all mandatory redistribution of income backed up by government force is unethical on its face. The first thing to note about this argument is that you don’t get to make it unless you are an anarcho-capitalist. Having even a minarchist government that only taxes citizens to provide a military defense, enforce contracts, and offer a few amenities like trial by jury, violates this principle. If you justify those on the grounds that everyone benefits, whether they realize it or not, then you are making the same basic argument I would to defend Social Security. We are both just using personal judgment to draw the line in a different place when arguing about consequences. In fact, Social Security is relatively far less redistributionist than most other government functions. It is mostly funded by a dedicated tax that requires the recipients themselves to usually pay the biggest part of what they eventually receive.
Some object that it is a Ponzi Scheme. This criticism relies entirely on radically redefining the meaning of “Ponzi Scheme.” Social Security is funded in a way that is transparent and public. Yes, it relies on future income to work but so does paying off your 30 year mortgage. There is every reason to believe this future income will be there. This will likely involve a little tinkering with the retirement age, the inflation adjustment or some other components. This has done before, could easily be done again, and is public knowledge.
Some object that the Social Security Trust Fund buys government Treasury Bonds. If I save a percentage of my income in a private retirement account and invest it in Treasury Bonds, I will universally be seen as having made one of the safest and most cautious investments possible. If I save exactly the same amount through Social Security and they also invest it in Treasury bonds, some of the same people will freak out about it.
Some object that they could do better investing the money themselves. Some smaller number are even right about that. This misses the point. The purpose of Social Security is not to make our most skilled investors richer. It is to make sure the majority of citizens (who are not good at saving and investing) don’t become a problem for themselves and others in their old age. The private investment markets are, and should be, giant machines where money is transferred from those who are bad at investing to those who are good at investing. That makes them a great way to decide which economic ventures get funded. It makes them a terrible way for people who are bad at investing to provide for their own retirements.
The Social Security System has been a huge success at reducing poverty among the elderly while requiring most people to pay for most of their own retirement expenses. Having more of the elderly self-sufficient consumers rather than helpless dependents is good for everybody. Libertarians should realize that the objections they have to government in general are relatively LESS applicable to Social Security than almost any other government program. And they usually eventually do. But often not before they get to retirement age.