social security | Lex's Socratic Dia-Blog

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).

I’ve been hearing a lot of criticisms of the social security system from my libertarian and objectivists friends. I personally believe that the only way to ensure that young children eat brocolli is by enforcing or incentivizing that action through government policy. What am I talking about? Basically, we do not always know what is good for us, until it is too late. This will make Ayn Rand turn over in her grave, because the idea of freedom to many people is that they can do whatever they want (as long as it doesn’t harm others) and must take responsibility for the consequences of their actions.

This is all well and good, and it’s a beautiful theory of how a society should function, much like the theory of a free market. However, we must then be willing to live in a society that provides no safety net. We must be willing to close off all emergency rooms to patients that can’t demonstrate the ability to pay for their treatment. We must be willing to let the unemployed, homeless, senior citizens suffer or die from malnutrition due to insufficient funds to purchase food and minimal shelter. I am not willing to live in such a society.

We have to acknowledge that a safety net is needed because human beings operate in a state of highly imperfect and incomplete information. We do not know enough about the decisions we make to predict to a reasonable degree the long-term effects of our decisions in all circumstances (especially given the circumstances not within our control). We should let experts help us out. Much like Google helps us sort out search results, we should let social security establish a basic guarantee of survival no matter the consequences of our decisions. This, in my opinion, allows for greater freedom than without such a basic guarantee. FDR put it well: ”Necessitous men are not free men.” (source)

What I am arguing for, is the same thing that Thomas Paine argued for: a safety net. Whether government or private industry is better at managing such a system is a secondary argument. I believe, much like with the broccoli, private industry will let people slip through the cracks which defeats the purpose of a safety net.