Privatized Social Security & Elder Welfare

It does not take a genius to realize that privatizing Social Security under any formula will result in the increased demand for welfare services for the aged when the generation with those privatized benefits is due to receive them.  The nature of the stock market is such that some of those people will have failed in their investments and they will need help—more help than those who are receiving the standard Social Security benefit. 

Some of those under the privatized option may do better; but others will do worse, and they will need welfare services which the government will have to supply if they are not to become a blight on those around them.

Not only that, privatization of Social Security invites wasting the investment of capital in our national welfare through the Social Security program, whatever its shortcomings.  Let me illustrate by analogy.

The other day some of my family ate at the Grandview Buffet in the Rivers Casino in Pittsburgh.  Since we had not been there before, we walked through the casino section to see what it was like. None of us had ever been to it before, or used slot machines.  My son saw a machine that took dollar bills and put in a $5 bill and began pushing buttons, which made the machine display different pictures and messages which did not really make much sense, except that eventually we figured the game was over.  He wondered whether he should try again, but he decided against it since none of us knew how it worked.

For those who do not know what they are doing, privatization of Social Security will be the same thing: many people will not know how to manage accounts in the private market, although undoubtedly there will be many offers of assistance available to them. I cannot imagine a constitutionally valid way of barring individuals from claiming the right to manage their Social Security accounts if they are privatized; and the more they are warned about the dangers, the more some individuals may claim that right.

We have the right to fail and to become a burden on society.  The purpose of Social Security is to be the end of the line in that process, at least to some extent. Privatizing Social Security would frustrate that intent and betray what the U.S. Constitution calls the federal government’s responsibility to promote the general welfare.