(click on ads for more details)

 Solving the Social Security Problem Once & for All

    by Harry Browne

The President's Social Security commission has acknowledged what politicians have been denying for decades -- that Social Security has no true reserve fund and that much higher taxes will be required to make good on the promises made to you.

The politicians don't put your Social Security taxes into a "lock box" for
your retirement. They give part of the money to current retirees, and
squander the rest on their favorite boondoggles. Since they've set nothing
aside for your rainy day, they can pay you a pension only by taxing your
children and grandchildren at higher and higher rates.

"Solving" the Social Security problem wouldn't be as difficult as the politicians and pundits make it seem. But to understand the solution, we must first deal with a few cliches.

    Investing for Retirement

Cliche #1: "Some people can't invest properly for their own retirement."

This is typical of politicians' justifying their interference by citing a problem they caused themselves. If they didn't tax interest payments, and if their monetary policies didn't create inflation, anyone could assure a secure retirement simply by putting 5% of his earnings in a bank savings account. No speculation or investing expertise is necessary.

Cliche #2: "Some people are too irresponsible to plan ahead for their own
retirement."

Of course, some people wouldn't provide for their own retirement -- just as
some of them won't brush their teeth. But it's wrong to hold the rest of us
hostage -- to force _us_ into a fraudulent Social Security scheme (or force
us to display our teeth for government hygiene inspectors) simply because
_some_ people won't take responsibility for their own lives.

Cliche #3: "Social Security would be more solvent if the politicians could
increase the system's earnings by investing the reserves in the stock
market."

Social Security brings a new dimension to such concepts as annuities,
insurance, and retirement. No long, complicated contracts. No actuarial
tables to pore over. Social Security operates on a very simple principle:
_the politicians take your money from you and squander it_. Allowing the
politicians to boost Social Security's earnings by investing its reserves in
the stock market would just give them more money to squander -- and they'd
still be back soon enough to increase your taxes again.

Cliche #4: "Gradually 'privatizing' Social Security will wean people off the
system."

The first time the stock market dives, the politicians (both Democratic and
Republican) will jump on that as an excuse to take away from you any further
control over your own retirement.

    The Problem & the Solution

Social Security is inherently unsound because it's a political program --
run by politicians for political purposes. It will never work. And no attempts to fix it, reform it, or refinance it can make a silk purse out of a politician's ear.

Only a purely libertarian solution can make things right: Shut Social
Security down -- completely, immediately, and for good. End the Social Security tax tomorrow morning and stop making Social Security payments tomorrow evening. Anyone under 50 can have a better retirement putting 10% of his income in the bank instead of 15% into Social Security.

And what happens to those who are currently dependent on Social Security --
and those too close to retirement to build a new nest egg?

Have the government make a one-time purchase of private annuities -- secure,
non-political annuities that guarantee the same income Social Security is
paying now to senior citizens.

How will the annuities be paid for?

Sell off assets the federal government shouldn't own anyway -- power
companies, pipelines, unused military bases, western lands, oil rights,
mineral rights, and the hundreds of thousands of federal buildings that
serve no Constitutional purpose.

This approach doesn't appeal to politicians, because it takes tax money and power away from them. But the only alternative to it is to resign yourself
to having more and more of your income taken from you and poured down the drain.

---

Harry Browne was the 2000 Libertarian presidential candidate. You can read more of his articles at http://www.HarryBrowne.org , and his books are available at http://www.HBBooks.com .


|*|*|*|*|*|*|*|*|*|*|*|*|*|*|*|*|*|*|*|*|*|*|*|*|


FreedomWire is Harry Browne's email list. You are encouraged to forward copies to friends and business associates, and to reproduce any
items herein as long as attribution is provided for articles and the subscription instructions below are included.

To purchase Harry Browne's books online, visit http://www.HBBooks.com

To read Harry Browne's commentaries online, visit http://www.HarryBrowne.org

To join the Libertarian Party online,
visit http://www.lp.org/action/join.html

TO UNSUBSCRIBE from this list, send an email to
Majordomo-FreedomWire@mjx.Harry

Browne.org with the words unsubscribe FreedomWire on the first line of the body of the message. Please leave the rest of the message blank.

TO SUBSCRIBE to this list, send an email to
Majordomo-FreedomWire@mjx.Harry

Browne.org with the words subscribe FreedomWire on the first line of the body of the message. Please leave the rest of the message blank.

TO COMMUNICATE with us, please DO NOT reply to this message; this address is not monitored. If you wish to communicate with the editor or with Harry Browne, please send email to FreedomWire@HarryBrowne.org