In This Issue, March 2005

by Edward Hudgins
The debate over the future of Social Security is the current great battle between individualism and collectivism. Currently, the fate of Americans when they reach their Golden Years is dependent in part or whole on a system, created and maintained by paternalist politicians, that pits citizens against one another; it ties the prosperity of one to the impoverishment of others. The only question for the supporters of the current system is who are the victims. Does one group suffer higher taxes to help another? Does one group have benefits cut to spare the costs to others?

As I point out in my piece in this issue of The New Individualist, the bottom line for Social Security—and most other welfare state policies—is that it not only robs individuals of their money and the far higher rates of returns they would receive if they invested that money in private accounts, it also robs them of personal autonomy. A reason that the Bush administration is having political difficulty promoting its reforms is that it has spent too little time and effort casting the debate in terms of basic moral principles, of individual liberty versus state or social control of one's life.

While the Bush proposal is a welcome step in the right direction of getting the government out of the retirement business altogether, it is also necessary to pay attention to the proposed mechanisms for allowing individuals to own personal accounts. As Frank Bubb points out in his article, any reform must make certain that the federal government does not exercise control over companies in which the funds from private accounts can be invested.

If, for example, the federal government is able to specify that funds can only be placed in politically correct portfolios, for example, those that meet the criteria of environmental extremists who place dumb animals and dirt over the lives of human beings, then the federal government could foist truly onerous regulations on American enterprises through the leverage of Social Security investment funds.