Re: DAILY SUMMARY April 22

[WFurst@aol.com]

It is surprising in a way that the discussion has become bipolar -- the 
privatizers vs the present system of social insurance. America has been a 
latecomer in modern times among rich nations to even consider the concept of 
social obligations, by workers for those unable to work. In former eras of 
human development the community has always been responsible for the old, the 
sick and the infirm. Of course societies were poor and provisions for help 
were limited. The old societal arrangements were disrupted by the industrial 
revolution and modernization. For the first time in human history, developed 
nations have sufficient resources to provide decent living conditions for all 
its people.

With increasing wealth and resources come increasing social responsibilities. 
Given the wide disparities in income and in earning power and in investment 
opportunities in our country, it seems essential for society to provide a 
firm floor in income for the elderly and for those unable to work. Instead of 
retreating from this principle we should consider the European example and 
add children to the category of people who benefit from social insurance. 

The privatizers set up a specious alternative. There is nothing in the social 
security system that precludes private savings or that makes it uninteresting 
for potential beneciaries. The paucity of social insurance benefits act as a 
major incentives for private savings.

Privatization superficially apopeals to basic American concepts of 
individualism and personal initiative. In fact it is nothing but an 
unconscionable grab for public funds by those who with high incomes and 
better education at the expense of the vast majority that desperately needs 
(even when it does not recognize it) the protection that social insurance 
provides. The younger generation in America does not remember the Depression 
and  is currently dazzled by a booming economy and stock market, and 
considers itself invulnerable. But nobody is invulnerable. You only have to 
look at the South Asian economies which were booming just a few years ago. 
And the younger generation -- which is described as doubting that they will 
ever benefit from social security -- is alrady benefiting greatly at this 
very time. As I understand it, almost 25 percent of all social insurance 
payments go to young widows, children and to young workers with disabilities.

Every Amercan child is entitled to hope that it will enjoy the sucess to make 
dependence on social insurance unnecessary.  But insurance is for unforseen 
circumstances. Some people dont have car insurance; some people dont insure 
their houses against fire. Some very rich people go broke and are grateful 
for social insurance. As a society we should insist that every person has 
social insurance to provide basic necessities (and also health insurance, 
butr that is a different subject).

Finally there is the argument that the return on payments to the social 
security system is not good enough.  But this argument is based on putative 
high returns being available to every one and assumes that no one ever loses 
any money. Not every one has the best possible investment advice available. 
Investment advisers congregate around people with lots of money and tend to 
ignore the individual needs of small investors. These have to pay high 
charges to get any attention at all which are never reflected in the 
published calculations of potential investment returns. More importantly, 
this argument completely ignores the vast payments  made by the system to the 
young, the widowed and the disabled. If these insurance risks are integrated 
into the calcuation, the return may be better that other investments 
available to average people.