Where's the Plan?

Washington has no plan. The fundamental problem is the experts in Washington have not paid attention to the changing dynamics of the system. The experts talk about the problem as though it will not occur until some distant stardate. The world has changed, and the experts haven’t noticed. The problem is now.

Washington Has The Wrong Problem
The experts in Washington have focused the energy of the nation on two myths (view all of the myths). Washington thinks that the problem is demographic, ie the number of retirees.

You will hear that the number of workers per retiree is declining since 1955. This may be true, but consider that workers in 2011 contribute at a higher rate and against a larger cap than workers did in 1955. There are workers in 2011 who contribute as much as 77 workers did in 1955 on an inflation-adjusted basis.

The other argument is that we are living longer. The number one factor in increasing life expectancy is fewer babies die at child birth.

The experts are completely out of touch. The logic used in both of these arguments is so faulty that even if the experts are right it is purely by accident. If you extend the logic of the experts, we must cut benefits on those who have contributed the most because fewer babies are dying at child birth. It makes no sense. Washington has no plan.

Washington Solutions Will Have The Opposite Effect
Given that the experts are looking at the wrong problems, it shouldn’t surprise anyone that they have the wrong answers. What will surprise you is the most likely outcome of their ‘solutions’ – the crisis that we are trying to avoid.

Social Security is running out of money. This is an outcome, much like a fever is the outcome of the flu. The real problem is that Social Security is a terrible investment. It should surprise no one that a terrible investment runs out of money. 

The experts tell us that there are only two solutions, raising taxes and lowering benefits. Comically enough, these are the two solutions which will drive the system into shock. These approaches are treating the symptom and feeding the disease. If we make Social Security a worse investment, more people will flee the system.

We either fix Social Security for all generations or it will fail a generation in a spectacular fashion.