I know that we (here) all know SS is a ponzi scam and should be abolished outright, but since that may not ever happen, what's worse between putting it in the hands of wall street vs. leaving it to the SS trust fund? Have any Austrians/Austro-libertarian scholars ever said which was a greater evil?
I was leaning towards leaving it in the SS trust fund while reducing benefits (no per-person payouts more than $1400/mo), but some libertarians say that partially privatizing it would save money.
I don't know everything about it though, so I apologize if any elements of this post seem stupid.
Privatiziation of Social Security is just as big as a Ponzi Scheme as Social Security itself. The government still steals your money.
The payments still come out of your paycheck automatically. Outsourced tax collection is still tax collection. Anything less than abolition is not worth a sniff.
There is no trust fund or, to be more exact, there are no funds in the "trust fund." Social Security exists only as promises made by the government to one group of people to pay them money taken from another group of people, promises which the government had no right to make regarding money they had no right to take. That said, SS is no worse than any other redistribution scam and our entire economy is infused with redistribution from top to bottom. We have actually achieved the state of affairs mocked by Bastiat as everybody stealing from everybody else. The West has entered a period of economic insanity.
I think the right solution is:
- Abolish the category of "payroll tax" and count all income taxes as simply taxes and increase the standard deduction to appropriately account for the true tax burden that is being borne by the public.
- Dissolve the "trust fund" and dispense with all "IOUs" from the Treasury to the SS "trust fund" as satisfied. This is a step to end the illusion that Social Security is a repayment of monies which had been earlier paid into the "trust fund". Social Security is, of course, paid out of monies collected in this fiscal year which is part of what makes it such a sham.
- This converts SS on paper to correspond to what it is in reality ... a year-by-year redistribution of money from taxpayers to tax-feeders and stops the hemorrhaging of the public treasury beyond what can be carried in the national debt (which is a separate problem all unto itself)
Of course, these changes will never happen becuase they are politically impossible. The only politically possible solution is total systemic collapse. TPTB know it's coming but even they are not sure when it will happen. When Social Security (and the entire Federal budget) collapses, the entire US economy will at the same time be in major turmoil and TPTB will simply blame the collapse of SS and other entitlements on the "economic collapse" and wash their hands of the matter. The market will correct the imbalances - as it always does - while the politicians walk away scot free because they can't be blamed for a natural disaster.
Clayton -
The Social Security taxes pay for the interest on the debt the Fed lends out also...
What Clayton said. In addition, the budgetary pain (read: unfunded liabilities) could be mitigated somewhat by 1) ending the regressiveness of the payroll tax, and 2) means-testing benefits moving forward. That will make the welfare-redistributive nature of the program even more apparent, of course.
The keyboard is mightier than the gun.
Non parit potestas ipsius auctoritatem.
Voluntaryism Forum
Real privatising would let private individuals decide how much they will save and how they will invest those savings.
Unfortunately, "privatising" will probably end up meaning that the government takes it and then decides which Wall St. firms get to manage it, and in what ways. It will also mean one more excuse for the government to control what companies do. If the "privately-managed" fund invests the money in bonds of companies, after a few presdidential cycles we'll see politicians use this a s a reason to hassle some companies and bail out others.
The most likely outcome for SS over the next 2 or 3 decades is that it's basic structure and control stays like it is, but the tax goes up and the benefits go down, and that the burden of both is borne a little more by high-earners and less by low earners.