Of all the arguments against private savings accounts for Social Security, there is none so condescending as the belief that Americans are just too dumb to entrust with their own retirement funds. In today’s Washington Post, Sebastian Mallaby writes that too many choices will distract and confuse us poor hicks:
The fact that freedom triumphed over the totalitarian systems of the 20th century should not be read as proof that people want all freedom, all the time. The East Europeans who overthrew communism were escaping from an anti-choice extreme. But the American system, which features more risk and inequality than any other advanced society, is over at the opposite end of the spectrum. It shouldn't be assumed that Americans want to embrace individualistic risk more than they do already.Thank you, Comrade Mallaby, except private savings accounts will not be foisted upon unsuspecting workers. From the very beginning, the savings accounts have been proposed as a voluntary program for those willing to risk a better return in exchange for reduced guaranteed government benefits. If you’re a worker under 30 who harbors strong (and justified) doubts that Social Security will be around for your golden years, maybe you’d prefer to roll the dice. (A apt metaphor that leads perfectly to my next point!)
However, if the government believes that young workers can’t be trusted with Social Security money, what about Social Security recipients? We’re told that Social Security is designed to prevent poverty among the elderly, but can we really trust senior citizens to use this money wisely? Evidence is mounting that we cannot. From the Boston Globe: “Casinos a refuge for elders – at a cost”:
Kario and Stern are among thousands of senior citizens in California who have become regular customers of the state's growing number of Indian casinos, which now look to the elderly for half their business, specialists say. Casinos actively encourage the trend by dispatching fleets of buses to retirement communities and senior centers and by offering incentives such as buffet vouchers.If young Americans are too stupid to save responsibly, then clearly older Americans are too dumb to spend responsibly. The time has come for the government to live up to the true intention of FDR’s plan and ensure fiscal security for all retirees by tracking every dime from taxation through distribution. Pass the Anti-Casino Act of 2005! Thank you!
The trend reflects a national pattern: The federal National Gambling Impact Study Commission in 1999 found that the fraction of US seniors who gambled jumped from 20 percent in 1974 to 50 percent in 1998, a surge unmatched by any other age group during a period when casinos proliferated across the country.
Extra SS stuff – Via Xtreme Blog, here’s Scrivener evoking Elvis Costello with “Is the Social Security Trust Fund worth Less than Zero?”
And from the Boston Globe: “Retiree accounts gaining adherents”