Social security is the only income many individuals rely on in retirement, and politicians are coming up with new plans to mess with it and delay my individuals’ payouts.
Politicians really are superb at finding projects to spend money on. It’s the easiest way to buy votes and power.
But these projects typically suffer from terrible deficiencies. Either they are short-sighted or they generate unintended consequences that negate any program benefit. And they almost always blow their budget.
None of that will stop them, though. The political benefits are too great. And they count on the electorate to not do much critical thinking about their proposals. This is a bipartisan problem. In infects both sides of the aisle.
The Washington Examiner shines some light on one just such a misguided proposal that could have terrible effects on our Social Security program and many drawing from it. And it comes from a surprising source:
Sen. Marco Rubio, R-Fla., and presidential adviser Ivanka Trump are reportedly collaborating on a paid leave plan.
Though no official policy has been rolled out, Rubio supports a so-called “conservative” version of paid family leave: giving new parents the option to delay their Social Security payments and draw benefits while at home with a newborn.
This is a terribly absurd idea. And the author of the following piece in the Examiner nails it.
But this plan is not conservative at all. Instead, it expands an overburdened entitlement program that desperately needs to be reformed.
This is similar to the private practice of “taking money out of your house.” You know the loan companies’ shtick. Your house went up in value, so borrow that increase and spend it on whatever you want. Anything to shove the consequences off into the future.
Now Mr. Rubio would like to create a maternity leave program in the same way. In effect, participants would be “taking money out” of their Social Security benefits to help fund time off to care for a newborn.
But isn’t there talk already of “means testing” or delaying the retirement age in order to save Social Security from bankruptcy? Mr. Rubio proposes to add another burden to an over-burdened program.
Social Security as it exists already promotes irresponsible personal financial behavior. People figure that Social Security will take care of them so they don’t save. Want the numbers?
Harvard economist Martin Feldstein found in 1996 that each dollar of expected Social Security benefit reduces retirement savings by 60 cents. Social Security itself has disincentivized private savings, and its expansion into paid leave would only exacerbate this unfortunate trend.
Before we even pointed out that such proposals as Mr. Rubio’s will only encourage more recklessness, someone beat us to it.
For example, Rep. Tom Garrett, R-Va., recently proposed a plan that would allow individuals to delay retirement in exchange for some student loan forgiveness.
But Social Security was not created to pay for family leave or student debt forgiveness — it was created to eliminate poverty among the elderly, a goal it may not accomplish if the fund is constantly raided.
Perhaps it’s a temptation too great for our leaders to resist. Raid Social Security to fund new benefit programs so taxes need not be raised nor the deficit increased.
Mr. Rubio is wrong for the reasons explained. So is Mr. Garrett. They are both Republicans, but not to worry. There will be Democrats who will be ready with their own plans to use Social Security funds. Probably to benefit illegal aliens.
If this sort of thing is allowed, do not be surprised when the age for full Social Security benefits is raised to 80. That’s if the program still exists.
Source: Washington Examiner