Relentless Pursuit of Wisdom and Liberty

The weblog companion of, dedicated to pondering, "If Patrick Henry could see us now..."

Thursday, January 27, 2005

Arguments of Social Security reform opponents

Just a quick thought: let's analyze what people mean when they say that instituting private accounts is "robbing Peter to pay Paul". According to my thinking, they can only mean one thing - that diverting part of a worker's payroll tax to his own personal account rather than putting it in the general SS fund is robbing the person to whom the "contributions" would normally go in order to set them aside for another person. The "Peter" they're talking about is of course a current retiree in the pay-as-you-go current program, and the "Paul" is the owner of the personal account. But keep in mind that you're robbing Peter of Paul's money to pay Paul with his own money (sounds like the state of nature to me).

So what's interesting is that if a private accounts proposal is robbing Peter to pay Paul, then the current system is robbing Paul to pay Peter, then robbing John later to pay Paul, ad infinitum. All personal accounts do is stop robbing Paul by half (or less, depending on the proposal) and allowing him to keep that portion of his own money, while still using the other portion to continue to pay Peter, in an effort to have to rob John less later for Paul's benefit.


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