So the state of the union deal was last night. Blah blah we all hate bushy yada yada.
He proposed a reform to Social Security. People are up in arms about it, of course. He outlined some apparent principles of this thing and I will regurgitate them from memory and add my thoughts:
- can’t change the benefits for those who have retired or about to retire. yeah, okay.
- any changes should be gradual so that people can have time to adjust. sounds reasonable.
- the money will be yours and the government can never take it away. well, it’ll be in the government’s hands, which is not quite as good as in my pocket, but in principle it’s nice that some administration or congress can’t decide that it wants the money I’m about to retire on.
- the money will grow faster in a private account. I remember back in economics class many years ago that the economy will do better in identical situations if people have their money than if the government taxes some of it then spends it/ redistributes it. I mean, the government basically wastes some of the money in overhead and things like that. It would seem to follow that the same would be true in private vs. goverment run retirement accounts. This says nothing about if it’s better for the rich or the poor or who ever; that’s another topic entirely.
Now, I don’t know the details of the plan itself, but it seems to me that if I get to choose where my withheld money goes and it’s stays mine, that’s almost as good as it being in my pocket and me getting to put it into my 401K or Roth IRA or whatever. Are mandatory withholdings good? In the end, probably yes. It would probably cost the taxpayers more to have retirees going onto welfare or other government programs because they didn’t save enough.
Again, I’m making assumptions. This time that the Social Security system needs to become zero-sum. I don’t think it can last with the young funding the old, etc.
I think basically most of this comes down to the thought that I’m doing reasonably financially and saving money under my own volition for the future because I want to and other people could be doing the same if they wanted to badly enough. I can make you a giant list of (non-MIT) people who are smarter than me, but I am here, at a job that I enjoy, making a reasonable wage, because I worked really freaking hard for the last ten years to the edge of insanity (literally) multiple times.
Or maybe I’m just trying to justify my way out of the guilt I feel for being in my situation. My head is starting to do this floaty/ detached thing, which means it’s time to stop now.