Main point: Most people don’t spend enough time planning for the turns and twists of life, not because they are “lazy” or “stupid” but because they are human and thus perpetually living in denial.
The idea of smaller government has been popular lately. People have been sold on the vision that there is a bunch of greedy lazy bureaucrats in Washington that inefficiently redistribute the hard-earned tax payer dollar.
I believe this is unfortunately true, but I also believe it’s the best we got and the best that we can have. You have to honestly look in the mirror, and ask yourself: who would you rather trust with drafting a financial plan for your future: (A) yourself or (B) a government bureaucrat.
It seems that A is the obvious choice for a significant group of Americans. Freedom sounds nice. However, I have come to believe that the majority of crappy expensive troubles happen in the impossible never-will-happen future of when we’re “old”, and so the plan we might draft now by ourselves will fail us when the hard reality of the future hits.
80% of medical bills we pay are for services done after we’re 40 years old (source). That’s a simple fact that most of us intuitively understand, but do not sufficiently plan for. That 80% is an average of $300,000. Three hundred thousand on top of whatever saving you have to do for retirement. Are you ready for that?
Personally, I don’t believe the majority of people have the discipline, knowledge, or time to stay informed and to save for something like that . I believe they (and me) need government to force them to save. Before you tell me that you want the freedom to do with your money what you want, please ponder whether you’re really ready to educate yourself on all the things you should save for and then actually put that money aside month after month. If you say you can, I’m sorry if I am slow to believe you.
That said, there are fundamental flaws in social security and medicare programs as they are now. But the existence of these programs is necessary in a society whose moral code cannot turn uninsured patients away from the hospital.
“I hope I die before I get old” is not just a Pete Townshend lyric, it’s also a widespread blind spot in the minds of the young and healthy. Sadly, most of us don’t remain forever young (including the band members of The Who).