What "values" created the existing system?

[Ken Diamond <kd@bmwinc.com>]

R.Rand wrote about my earlier post:

> 1. He says laws pased by Congress are unethical, unsustainable,
> and wrong.  The Constitution provides Congress the authority to
> pass laws it deems wise.  If you disagree with a law, the remedy
> is to elect Congressmen who agree with you, not to denounce our
> constitutional system.

The problem is that most those people who object to how the system is
treating them weren't around to elect congressman who would watch out
for their interests. Slavery was once constitutional. Constitutional
does not mean ethical and neither does denouncing the unethical demean
the constitution.

> 2. The present system is sustainable, contrary to his assertion.
> It has lasted for 65 years and with some appropriate and prudent
> changes can last indefinitely. The main change needed is a gradual,
> well-planned schedule of increases in the normal retirement age to
> keep life expectancies at retirement constant- such a change would
> not reduce the value of Social Security retirement but would keep
> it from steadily increasing. One such schedule involves increasing
> the retirement age by two months every year, reaching 70 in 2037
> and 75 in 2074.
 
To me sustainable means crafting system that has some uniformity in how
its treatment of suceeding generations of participants. That treatment
has changed to such a degree that I hardly call the program sustained. I
view each substantial change that is the result of unsustainable low
levels of taxation as a fundamental revision of the contract. Imagine if
the boomers were to demand the same rate of return as the WW2 received
from us. I don't want to be that kind of burden to the generation after
mine. Every generation should try to pay in about what it takes out.
They should try to be self funding.  

> 3. The decision in the early years of Social Security to give
> retirees of those years benefits larger than those based on their
> participation in Social Security was carefully considered and wise.
> Private employers who have installed pension plans for their
> employees almost invariably give past service credit for service
> prior to the installation of the plan.  In the case of Social
> Security, this decision recognized the years of work prior to 1939;
> it also made possible an immediate attack on poverty among the
> aged.
 
It's good politics to give benefits that people don't pay for.

> 4. Social Security is not a Ponzi type scheme, depending on enrolling
> a continually increasing number of participants. It will continue
> to work well if population growth levels off or even if population
> begins to decrease, highly unlikely. Populations trends are under
> continual study and are predictable.

It's possible to have a mature system with stable population. But giving
exceeding high returns to early particpant in a scheme by using the
contributions of those who come after is commonly known as a ponzi
scheme. And those high returns create a corresponding reduction of the
returns of the later participants.

> 5. Certain classes of employees were not included in the early
> years for a variety of valid reasons. State and local government
> employees were not included because the Constitution explicitly
> forbids federal taxation of state employees; today participation
> by such employee units is voluntary.

That misreading of the constitution is long passed. No well paid group
of excluded governmnent employees would ever opt to join the system
voluntarily. They are avoiding all the redistributional burdens inherent
in the system. More liberal than the population as a whole, govenment
workers generally approve of the "greatest social welfare program ever
devised" that costs them nothing. Additionally their contribution to
funded systems earn while they work. The combination means fantastic
retirement returns compared to what they would receive if they were part
of Social Security. And a portion of those returns is coming at the
expense of all those coerced into Social Security.

yours, Ken