Retirement Savings

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

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.

 

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Author's Notes:

If you got value from this post, please “Share” it.

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.

Games Billionaires Play

In case you've been off the grid for a few days and somehow missed it, everyone is reeling over these remarks by Secretary of Commerce Howard Lutnick:

“Let’s say Social Security didn’t send out their checks this month. My mother-in-law — who's 94 — she wouldn't call and complain. She just wouldn’t. She’d think something got messed up, and she’ll get it next month.

A fraudster always makes the loudest noise — screaming, yelling and complaining.”

Watch it on video if you don't believe me.

What's a lost month here or there between friends?

It didn't surprise me to find that someone who would suggest it was good sport to withhold Social Security payments just to see what happened is a billionaire.

According to The Street, Lutnick's net worth is between $2 billion and $4 billion.

The very fact that we can be so imprecise and assume it doesn't matter whether it's $2B or $4B is a big part of the problem, by the way.

“A billion here, a billion there, and pretty soon you're talking real money.”

  —Everett Dirksen

At the heart of this—if there can be said to be any heart in this situation at all—is the sad truth that for regular people, people just struggling to get by day to day and month to month, every dollar matters and no such lack of precision could possibly do anyone justice.

The Public Trust, or lack thereof

If you're so insulated from poverty that you start to either forget or just plain not care how hard it is for others of less means, you have no absolutely business being in any position of public trust.

It might not occur to you, dude, even if it's incredibly obvious to ordinary people hearing your remark, but your mother-in-law is probably able to be so cool because either social security is not her only source of money, or else she knows her daughter is married to someone who is mega-rich, so if she runs a little short, she has an obvious person she can call. We're not all so lucky, as it turns out.

Back in the real world

If I don't pay my credit card, does my bank shrug and say, “hey, maybe next month”? If the bank screams at me right away, is that proof it's defrauding me?

What are you smoking, Mr. Lutnick? Such willfully reckless incompetence should be literally criminal.

Folks on fixed income have monthly payments due now, not just “eventually.”

Any payment urgency is not about the character of any senior on Social Security, who typically has paid a lifetime to earn barely enough to survive on the tiny retirement income Social Security grudgingly affords them. It's all about the character of those they rent from and buy groceries from, and what they, these wealthy rent-takers, will do to society's most fragile members if they are not paid on time.

Last I checked, if I miss a single payment on my credit card, I don't even just get a penalty. They almost double my interest rate going forward.

Shame on you for suggesting there is no good reason for someone to insist their promised payment from the government actually be paid at the time promised. Are you trying to wreck the US Government's reputation for paying all its obligations. Social Security is not a gift. It is one of our society's most fundamental social contracts.

Turning the tables

If withholding what's due is your game, Mr. Oblivious Rich Guy, how about let's make it a serious felony to be unkind to or exploit folks who rely on the full faith and credit of the US government. Let's imprison bankers, landlords, and vendors who are ready to foreclose, add penalties, or raise costs or interest for the vulnerable.

Or, maybe…

Let's, you know, tentatively — just to see who cries foul or who says “hey, maybe next month” — deprive billionaires of all assets for a month or two, leaving them out in the world we live in with only the iffy hope of Social Security, just to see if they're comfortable with policies they seem to think so fair.

I bet the billionaires who cry loudest really are frauds.

 

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Author's Notes:

If you got value from this post, please “Share” it.

Also, if you enjoyed this piece, you might also find these posts by me to be of interest:

• Credit Cards: A Tax on “Being Poor”
  Why credit cards are a “private tax,” and thus double-taxation.
• Enough
  Why rich people have no business talking about the pain of taxation.
• Losing the War in a Quiet Room
  History and comparison of shareholder and stakeholder capitalism.

This essay grew from a thread I wrote on BlueSky. I have expanded and adjusted it to fit in this publication medium, where more space and better formatting is available.

The black & white image was produced by making 2 images in abacus.ai using Claude-Sonnet 3.7 and FLUX 1.1 [pro] Ultra, then post-processing to merge parts of each that I liked in Gimp.

Our Primary National Values

Biden and Sanders have been debating matters like Social Security. Can we afford it? Biden acts indignant that Bernie would suggest he's a threat to Social Security, yet Biden's record is plain, as well-summarized by Ryan Grim at The Intercept in this tweet:

Biden blatantly lied about Social Security at Iowa's Black & Brown Forum this week:

Q: "Do you think it's fair though for voters to question your commitment to Social Security when in the past you've proposed a freeze to it?"

Biden: "No, I didn't propose a freeze."

"You did." pic.twitter.com/DBzauK2n53

— Ryan Grim (@ryangrim) January 24, 2020

The Truthiness About Biden

Nor does Biden explain how and why his opinion has changed. In a worrisome pattern he seems to share with Trump, he simply denies he ever had an opinion that is clearly documented.

Stephen Colbert called this “truthiness”—an assertion of “facts” that come not from books or the head, but from the gut.

“Alternative facts,” Kellyanne Conway, counselor to President Trump, calls such affronts to reality.

Biden would have us see Bernie's views as extreme, radical, dangerous to consider. He offers himself as the safe choice. The message from the centrists is that Bernie's notions will bankrupt us. The truth is, many of us are going bankrupt just fine on our own. We need the government to pull the reins on corporate greed, but Biden can't even admit this is where the problem lies.

It's clear that the recent tax cuts for billionaires are part of an organized “starve the beast” strategy by the GOP. Such a strategy works in two steps: first take all the money out of the system into rich people's pockets, then declare that the government is short of money and that social programs must be cut. They've done step one. Now we're back in the same situation as happened the last time Biden championed cuts.

Has something changed? Because it looks to me like Biden has positioned himself as the realist, the compromiser, the one willing to pull a Susan Collins, hemming and hawing for the cameras so it looks like an oh-so-difficult choice, but ultimately “surprising” us by deciding that we need to be fiscally responsible and endure our middle-class medicine rather than ask too much of billionaires.

Because that's the picture he seems to be painting when he accuses Bernie, directly or through his advocates, of being too extreme, too radical, too untrustworthy, too … socialist.

Biden wants us to trust him, but trust him how? Why? The only one he seems to point fingers at is Bernie. And why? Because Bernie is willing to point fingers at who he thinks is the actual source of the problem.

Bernie is willing to say what is obviously true, that we don't need billionaires.

Assigning Value

Biden wants Bernie to be seen as obviously extreme. But is he?

We just had a candidate in the race that had half a billion dollars of literal pocket change. He will probably be as rich or richer at the end of the year as he was at the beginning of the race.

Moreover, Elizabeth Warren in a few simple sentences so destroyed this man's character that all that wealth could not overcome it, ending his run—clear proof that wealth does not measure virtue. Even given the strong tendency people seem to have to follow successful others, which is what seems to have gotten Trump elected, there are limits. As Sarah Kendzior so aptly says:

“When wealth is passed off as merit, bad luck is seen as bad character. This is how ideologues justify punishing the sick and the poor. But poverty is neither a crime nor a character flaw. Stigmatise those who let people die, not those who struggle to live.”    —Sarah Kendzior, in a 2013 essay Poverty is not a character flaw

All to say I don't think there is clearer proof that somewhere in our nation there is enough wealth to enable people to age with dignity: enabling them to be useful advisors and contributors to our society for more years, unlocking a lot of wealth and happiness. They can advise friends, family, and the community in personal and business matters. They can take care of grandkids. They can just not be a burden to younger people who are struggling themselves and might have to take time off for work.

Or we can say that it's more important, as a nation, to have a few Michael Bloombergs. My saying “a few” isn't casual. We cannot all be Michael Bloombergs. Of necessity, mega-wealth accumulates only in the hands of a few. The math only works that way. We're all taught we might one day be rich without bounds, but we should be taught that at some point increased wealth comes at the expense of others, and generally in a way that is disproportionate with actual value contributed to society. Whatever Bloomberg's positive contribution, he has not contributed that much more than other people.

Even if you think all his actions good, and that's up for debate, a lot of those actions are things any person with that money would have done, and are rightly attributed to the money, not the people. And many have done great goods for no reward. So while money is a crude metric of some amount of good people have done, we need to learn that it is not a precise measure and that we are not valueless nor these people with tons of money gods.

And that is what's being debated. Not just "social security" as words, but the values behind it. Our country generates wealth. We have allowed that wealth to flow to a few people, disproportionately. Our government is not a business. It is a group of our us that get together charged with administering a fair set of rules that allow everyone to succeed. The set of rules we have are out of balance, like a clothes dryer with the balance off. The term "wealth redistribution" is tossed around as if it's a bad thing, but it's like with the dryer, it will eventually stop if something is not done to get things back into harmony.

Social security is fair and humane, but it is also an assertion that in our quest to incentivize things as a rush for money, we have limits on how much one person may take from another. There is incentive enough in seeking millions, even many millions. There is little one can do with billions but buy governments or otherwise subvert the democratic will of the public.

That's what we're debating. Tax the rich to bring things back into harmony, or yield public control of resources on a bogus theory that over time we've realized we the public are nothing and only Bloomberg and his ilk have any entitlement to wealth for their amazing contributions.

Push is coming to shove. Billionaires are an active threat to the middle class. The GOP is actively teeing up exactly that conflict, daring Democrats to take that on. Bernie is up to it. That Biden paints Bernie as extreme suggests he's not.

Biden just isn't up to challenging billionaires' entitlement to the disproportionate wealth they have amassed. But without doing so, we'll run short of funds. At that point, we should fully well expect him to make the same choices he denies having made in the past.

So you perhaps understand why I've said I do not celebrate this “anyone but Trump” thing as a victory. I wanted Warren, but at this point, go Bernie!

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Author's Notes:

If you got value from this post, please “Share” it.

The essay which became this post started as a post by me earlier today at reddit.

I also very much recommend Sarah Kendzior's book The View from Flyover Country.