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Monday, May 01, 2006

Bankrupt Program

There was an announcement that Social Security will be defunct by 2040. Bush has said that we need to lay aside politics to restructure the system. I agree with half of the statement, and here is why:
I agree that we need to lay aside politics, but I think that politics should be laid aside for completely removing the social security system.

Based on economic freedom, the government is coercing people to pay money into a system that does nothing to protect them from harm from others. There is no reason based on freedom why the government should force people to put money into a retirement program if they earn money.

Similarly, there is no market failure involved that I can see that would give the government any reason to have a social security program based on efficiency. It seems fairly absurd to think that there would be monopoly, externality, or public goods related to retirement savings, therefore, the government is only creating a problem (a system that is rapidly going bankrupt) rather than solving one and I do not think that is the role of government from any perspective! There is no reason to have a social security program based on efficiency.

I understand that there would be a struggle if social security ended, but I think that it needs to happen regardless of how many people complain. Eventually, if we are realistic, I think most people recognize that social security will have to end someday, and that someday should come soon. It will continue to be a problem, I think, unless we end it rather than trying to restructure it.

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