If one owns Kennebunkport, the appeal of an Ownership Society is certainly understandable. For many of the rest of us citizens, however, the attractiveness of the concept is somewhat nuanced.
Ownership Society is a term that was being bandied about several months ago in support of adding some form of personal investment accounts to the social security system. The whole topic of social security reform seems to have fallen off the radar screen here recently, but it will no doubt resurface.
The Ownership Society argument apparently is that the more control we have over our own wealth and finances, the better off we will be, both monetarily and emotionally. But the proponents of the argument do not pay a great deal of attention to how different levels of wealth and finances might fare under an Ownership Society, or how citizens in those different levels might view an Ownership Society.
Those at the top of the wealth pyramid are probably all for a 100 percent Ownership Society. The fact that they have wealth is evidence to them that they can do a much better job of creating and maintaining wealth than can the government. (The fact that many of them inherited their wealth rather than created it is something they often overlook.) A goodly proportion of those with less wealth, however, aren’t as convinced that they can beat the system. Oh, they certainly want a considerable degree of freedom to handle their own finances, but they aren’t adverse to, and may even desire, some form of common safety net.
Moreover, if the matter comes down to what may be no more than a small annuity, say a social security payment of $ 750, $1,000, or even $1,500 a month, do many people really want to incur additional risk in order to have more “ownership?”
So the proponents of the Ownership Society concept might want to refine their arguments a bit. To date, the Ownership Society has sounded like a great thing if you already own a lot of stuff. But it hasn’t sounded like a way to get a lot of stuff if you are starting from little or no stuff.
And one other thing. One of the backers of such concepts as the Ownership Society is the Hoover Institution of Stanford University. Is it just me, or is anyone else bothered a little that some policy makers appear to put so much stock in advice from an organization named after the President who presided over the Crash of 1929 and the onslaught of the Great Depression?
DSH
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Well... we can all either act like Republicans and come up with a better option than the current system or act like the Democrats and simply complain about other people's ideas!! Some points to consider…in 1950, there were 16 workers to every one beneficiary of Social Security. Today, there are only 3.3 workers supporting every beneficiary. In 2017, the government will pay out more in Social Security benefits than it collects in payroll taxes. Within 25 years, the government will have to come up with an extra $200 billion a year to keep the system afloat and by 2041, when people my age retire, the system will be bankrupt! If we don’t come up with a solution then we will have to resort to the Democrat’s solution for everything – RAISE TAXES! W is not suggesting we allow people to simply throw all of their money in the stock market, but simply come up with a system where money that comes out of their paychecks goes into a low risk investment options (something which appreciates over time) so that when they retire, there is money waiting for them. I have no problem with my current payroll taxes, but it would be nice to know that there is some of that $$$ waiting for me when I retire. How can a system (like today’s Social Security system) that get 2% annual returns be a good option! Wouldn't a system, which enables workers' investments to appreciate make a lot more sense. Just because someone with little existing wealth is not accustomed to managing a portfolio doesn’t mean they are averse to establishing and in a limited way managing their own $$$$. When you talk about risk… the risk of the current Social Security system collapsing far exceeds the risk of individual workers having the option of putting their money into bonds or even a money market account, which is about as low risk as you can get. Do we wan to head in the direction of Europe's socialist welfare state? Look at where it has got their economies... i.e. Germany with a 11.7% unemployment rate.
ReplyDeleteWho is controlling the returns on the SS investments? With little efforts, my personal 401K investments for my retirement have averaged over 8% in the past 5 years, and yet SS is getting only 2%? What is wrong with this situation? In today's society, with everyone wanting everything now, I have termed it the 'Give it to me on a silver platter syndrome.' Why can't society realize you reap what you sow?
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