Friday, February 04, 2005

Social insecurity

There's a great scene (one of many) in "It's A Wonderful Life," where Jimmy Stewart as George Bailey attempts to explain the banking system to an unruly mob of scared neighbors who think the bank's going to run out of money.

In it -- I don't have exact quotes here -- George entreats everyone to understand that their money isn't physically at the bank right now, not every single penny and dollar for every single person, because it's in their homes, it's invested elsewhere so that they can have some kind of rate of return. Not everyone gets him, and so he ends up having to pay out the money he was about to use on his honeymoon to quell the fearful and keep the bank open so that Potter can't take it all over.

This movie is hugely popular at Christmas, and for some all the year round. People have internalized it to the point where they know what you mean by Pottersville, and Zuzu's Petals was even the name of a band.

So why would anyone agree that privatization of social security makes sense?

I sure don't know about all of the math, fuzzy or not. And I do believe we need some rehauling to keep this viable another 50 or more years. But the idea of letting Joe Average use his money to invest in the stock market to save up money for his social security is not only precarious and dangerous -- it avoids the basic understanding of social security money. I'm not getting my money when (if) I start drawing on it in my 60s -- I'm getting someone else's, just as someone ahead of me is now getting my money. Like the Building and Loan in "Wonderful Life," the money isn't just sitting there idle waiting for you to claim it -- it's working to pay part of the expenses of the latter years for the elderly right now. It's over there, and over there. So if Joe Average makes a killing in the stock market, he's going to want his money when he's ready for it. Not someone else's, who didn't invest -- or who didn't do well.

The whole concept came out of a period where the government and many of the masses believed that as a prosperous nation, we had an obligation to help one another. It wasn't just "all for me, and if you can grab some, fine, some for you." It makes me ill to see how all of that is being torn down, because that's not something that just springs back up with a new cycle.

Social Security needs help -- but it does not need this help, President Potter.

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