I often hear people say that Social Security should be eliminated, that we'd do better with our own 401K's.
There are a lot of problems with that argument.
The argument is that people could invest their money better. Maybe. But they can also invest their money worse. So it's a very uneven policy. And that is ultimately cruel. It makes gamblers of us all, and experience shows that gamblers are often a lot more confident than is warranted.
Moral Failing
The sociopaths among us often say, “Too bad. Individuals should take responsibility for their lack of saving. It's not my fault that some people don't plan.” Is that so? I doubt it.
You see, those same people are telling us that we should eliminate the minimum wage, asking “if the market doesn't want to pay someone enough to even live, why should it have to?” So exactly where is the savings supposed to come from?
On the one side, people work hard for hardly any money. On the other side, they're told their failure to save is a moral failing. But where is the discussion of moral failing in having more money than God and yet still being unwilling to help raise people out of poverty? That seems the biggest moral failing.
Dynastic Wealth & Connection
Moreover, a lot of what makes the difference in who succeeds or fails is one's parents. Dynastic fortunes. Better schools. Better connections. Race. Sometimes even just better health or better clothing. The narrative is spun that the rich worked hard for their money, but, in my personal experience, poor people work much harder for the scraps they are thrown than rich people ever do, and the notion of “meritocracy” is nonsense because the people who get ahead are just those who get to start ahead of the others.
Social Security as Moral Agent
![[A scale on which a 401K plan as a piggy bank standing amid a pile of coins is on one side of the scale, and a representation of the Capitol building labeled 'Social Security' is on the other side of the scale.]](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigKoBBpUmxb44P1y6RzoTjr1C8BNQOPfTnl7LMcR8SRtQGRwHH0gCxkZNP7EyzbOhpR5Si8vEItWm_9Gxnqe1wBlszHcbdtKG69pobteKLdy0DD1ux543hmQWfOPtCgKpPnVjZilvekg3hb5k1QzYn-j7sUosiVC1ei-6FhQxZoph4MXkr1h48GscXZlk/s800/401k-vs-social-securiy-relabeled2%28800x700%29.jpg)
While on the topic of morality, let's also look at the structure of Social Security itself. People like to compare it to a 401K, but it's not like that. It's not a bank account. It's a very different beast.
As an example, if you become suddenly unable to work, it kicks in right away, even if you haven't paid a lot up front. That's very different than a bank account. Also, if you live for only a short while or for a long time, it continues to pay you through your life.
There might be issues with getting necessary cost of living adjustments, but the only reason we don't do those more often is that the aforementioned rich sociopaths insist it's more important to give tax breaks to the wealthy.
They'll tell you that Social Security is intended only to supplement your retirement, not to be the full amount, and yet they'll happily attach penalties for those using Social Security if they try to draw money out of it while also getting other income. That's not really how supplements work, and it's a disincentive to additional work.
A Social Contract
But my point is that the contract is not for a specific quantity of money. It is a social contract. You pay into it while you're able and you are paid when you're not able. We could do better in the “helping people to get paid” part, but the point is for it to keep a great many people from falling into poverty—to add dignity.
It's worth noting that Social Security did not arise in a vacuum. While people could invest their money, a lot of people didn't, or else were losers in that gambling. Before Social Security, in the 1930s, the elderly poverty rate in the depression was something like 70%. So there is an objective way to understand what this did for the public. Some have called it the most successful anti-poverty program in the history of the US.
Implementation Details
If we were sincerely worried that investing in the market were a better bet, we could arrange for the Social Security trust fund to do that. That's just an implementation detail and has nothing to do with the overall social promise. If DOGE wanted to do something helpful, instead of aggressively dismantling all of the US government's ability to provide value to the public, they could analyze whether there are better ways to manage the funds.
But, ultimately, government is not a business and Social Security is not a profit & loss center, even if it's popular for some who don't like it to portray it that way. It mostly pays for itself, but from a moral point of view, its real purpose is to say that we as a society need to have a commitment to our sick and elderly, to assure they are taken care of, before we declare a profit.
If we as a nation are able to give tax breaks to rich citizens only by cutting social programs, then the rich are preying on the poor. The health and welfare of all citizens is our first priority as a nation. We should not be preferencing the already-preferenced before we have attended to that.
The Present Day
This topic is very apropos in the current market. We may be about to enter another recession, perhaps a depression. 401K's are down. So the claim that we could do better investing on our own is uncertain, but is again certainly going to test a lot of ordinary citizens, postponing their ability to retire.
And I emphasize that the choice of when to retire is not just a whim. Even ignoring age discrimination, age wears on a person, and some people do physical jobs—actual hard work, as opposed to the metaphorically hard work done by rich executives—that leaves them depleted. So, delayed retirement is not just an inconvenience, it is in some cases cruel torture, and in some cases impossible.
But even as we are potentially entering a depression, the billionaires are salivating. They are looking forward to “buying low”. They're treating this roller coaster as a buying opportunity! They plan to get rich on this depression. Even as others suffer and probably many die. As homes and farms are foreclosed upon. They are gleeful.
Betting on Regular Citizens
This is the time when Social Security should be doubling down and assuring people it will increase benefits to cover rising costs—although it wouldn't be terrible if we also just impeached the President who's artificially causing those rising costs by imposing tariffs that really no sane business people think are a good idea. Social Security is a social contract with the population about what our priority is, even in tough times. Especially then. So, if we need more money, we should be bumping the tax on those gleeful about what a great buying opportunity this is. That would properly reflect our societal morality.
They, the rich, would probably whine that such a tax singles them out. They'd speak of their pain, and claim that others were just jealous of their wealth and cleverness. No one should stand for such rhetoric. The rich folks making noise did not get their power by dealing honorably with us citizens. This is not jealousy speaking. It is a desire for justice. Be glad I'm not suggesting—as some have and still do—that we just “eat the rich” and be done with it. Proper taxation of accumulated wealth (not just income) works for me.
No one needs that much money anyway. It's clear from their observed behavior that one can only buy so many gold toilet seats before one starts to wonder what the point of excess riches is, and really it seems the only thing that one can find to spend such wealth on is buying governments. And then, apparently, running them badly and cruelly. The Peter Principle in its most high stakes form. No, I'm not going to feel sorry about suggesting taxation.
Author's Notes:
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An early version of this post lost some text from the original that was restored a few hours after posting.
This post originated as a rant by me on Mastodon. Small amounts of content have been aded, it has been lightly copy-edited, and its typography has been adjusted to fit this forum. Also, some of the tariffs were paused today as this revised version of the essay goes online, along with claims that this was all strategic. But that only underscores my point about gambling. There is no certainty in the 401K approach like there would be in a societal commitment to care for its weaker members.
The graphic was produced using abacus.ai using RouteLLM and FLUX 1.1 [pro] Ultra, then post-processing in Gimp.
