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Newspaper Article

    Matt Kibbe: Social Security bankruptcy is the real inconvenient truth

    BY Matt Kibbe
    05/04/2007

    Next time Al Gore accuses President Bush, or anyone for that matter, of putting off global warming for future generations, ask him what he plans to do about Social Security.

    Gore’s recent agitprop production, “An Inconvenient Truth,” has sounded alarms for anti-energy extremists all over the world. A rash of radical policy proposals have been put forward to address a debatable crisis. Gore has proposed several reforms, including a moratorium on all coal-fired electric plants.

    Few care to explore or explain the negative consequences that these radical proposals would have on the typical American household. Consider that some states derive more than 90 percent of their power from coal. A moratorium would drive energy costs through the roof, while at the same time eliminating thousands of manufacturing jobs.

    It should be understood that many of these jobs lost are already in the most economically depressed regions of our country, which would be the same areas that would feel the biggest hit from the increased energy prices due to going “green.” And with all of this, few scientists dare to assert that America would seriously alter the path of climate change by making these economically devastating changes.

    In contrast to all of this hysteria is the real inconvenient truth: retirement security.

    The crisis looming for the government’s Social Security system is certain. What’s more, a solution that would reverse this real, present-day crisis is clearly available and economically viable. But where is the outcry on page one of our newspapers or the debate on our TV screens? Where’s Hollywood?

    The crux of the problem is the way the system was originally conceived; multiple workers pay a portion of their income into a fund that would support each retiree. When the system was first introduced in 1935, this ratio was 40 workers for every one retired person. As birth rates have gone down and life expectancies have gone up, smaller generations of workers have had to support an ever-increasing numbers of retirees.

    As a result, by 2017, Social Security tax revenues will be less than promised benefits, and a government system that millions of Americans depend on will become bankrupt. The year 2017 is 10 years down the road, not 1,000, or 200, or even 50.

    The solution to Social Security’s problems is to acknowledge the program’s inherent flaws and to shift from a government-run welfare program to a system of personal ownership. Specifically, allow people to divert a portion of the money they pay in Social Security taxes into an account they own, control, and for which they take responsibility.

    Numerous personal retirement account proposals have been put forward that would do precisely this. In addition, they would maintain benefits for current retirees at the same time that they allow younger workers to phase out the current broken system. They may not be as popular with Gore or the wealthy Hollywood elite who have no concerns about financing their retirement, but it addresses a problem that affects everyday Americans.

    The chief critique by the fashionable green lobby is that we cannot pass off problems onto future generations. Yet, it is the next generation, not a generation a thousand years from now, that must grapple with retirement security.

    Unlike global weather patterns or thousand-year trends in climate change, there is little dispute concerning the impending disaster that awaits Social Security as a result of inaction. Those are simply the facts, as inconvenient as the truth may be.

    Matt Kibbe is the president of FreedomWorks, a national grassroots organization dedicated to lower taxes, less government, and more freedom.

    by Matt Kibbe on 5/4/07.