If You Really Loved Me You'd Let Me Eat Your Brain

There are three things I haven’t heard mentioned in the national debate over Social Security reform that I think warrant greater attention.

Private account assets can be passed on to your family. Under the current system we’re paying into Social Security as long as we work. What happens to all of the money you’ve paid into the system if you die when you’re, say, 61? You’ll get nothing. Your survivors get a death benefit, which is less than $300, and they might get benefits if you have minor children. Still, the benefits they receive will be a small percentage of what you’ve paid into the system.

Under the proposed system of private accounts you can pass on the assets in your private account to your survivors. It’s just that simple. That seems to be much fairer than participating in an enormous lottery system that only pays out if you’re lucky enough to reach a certain age.

The government can’t spend what it doesn’t have. Under the existing system workers and employers give money to the federal government which then spends it as quickly as possible. Any talk of a trust fund is misleading – there are no physical assets, no piles of money locked away in a vault. When the government gets money for the Social Security system it writes out IOUs to itself and spends the money. Tthe best way to cut government spending is by not giving them the money in the first place.

Under the proposed system of private accounts part of our payroll taxes would go into investments that we control. The money doesn’t go to the government and they cannot access our private account funds.

Money creates jobs and fuels growth. Under the current system monies paid to the federal government are spent, and not always in ways that I’d call productive. I could list hundreds of pork barrel projects and social engineering programs gone awry, but in general I’ll say that the federal government doesn’t always allocate money the way I’d like them to, and even then, when viewed as investments, they don’t generate great results in terms of jobs created.

Under the proposed system of private accounts we choose where to invest our money. Our market economy guides capital to where it is most productive. We’ll choose investments based on expected returns. Some will invest in causes they deem to be socially worthy. No matter where our money goes one thing is certain: Thanks to our fractional reserve banking system deposits in private account actually create money. This will lead to job creation and economic stimulus, though not so much so as to have to worry about inflation.

Comments? If anyone has heard these points addressed in the mass media I'd love to hear about it.