It is widely acknowledged by people of all economic and political persuasions that something will have to be to be done about Social Security in the coming years. Some want to shore up the system through higher taxes and other reforms. Others want to convert it to a private-oriented pension system. Even President Clinton has entertained the prospect of allowing some privatization.
Among all of the options debated, however, I notice the conspicuous absence of serious discussion about the moral and cultural implications of the program itself. It is on principle and ethics, rather than numbers, that Social Security truly fails.
Conceived as an insurance program, Social Security will soon fail to deliver even a minimum market rate of return. In fact, the younger generation of payers will count themselves lucky to even get back their premiums.
In the Parable of the Talents told by Jesus (Matt. 25:14-30), a servant is berated and cast out of the house by his master for burying his money in the ground rather than investing it. But today's servants of the Social Security system face no choice. The masters in Washington have already squandered the money.
More and more, Social Security appears not to constitute an "insurance" program as much as a mandatory, intergenerational, wealth-transfer scheme. We must ask: Is it right that the young be taxed to enable the government to provide a generous retirement program for able-bodied older people? What are the social and moral implications of this idea?
The very existence of Social Security has convinced tens of millions of people that government-mandated savings are utterly necessary for security in our later years. This is part of the reason personal savings have systematically declined since the program's inception, reaching a low of zero net savings in recent Commerce Department figures.
But suggest that Social Security be replaced by a system of private savings and investment, or that the program be abolished altogether, and you will elicit gasps of horror. The cultural effects are profound. Before Social Security was created in the late 1930s, it would have been equally crazy to suggest that the government provide a secure and stable income for the aged by siphoning from their paychecks in the early years. Indeed, the program has had a profound effect on the way we view the role of government in society.
Just as parents care for their young now, it was once well understood that the middle-aged have a moral responsibility to care for their aging parents. This establishes a social link between the generations, an interdependency which is essential for the continuity of values and habits of a mature people.
Social Security has gone a long way toward severing those ties, freeing people from the responsibility to care for their own parents. It also reduces the incentive to have children, since it is no longer understood that they will be their parents' safety net, should they be needed as the parents age.
Elderly people in every society have been credited with having a broader long-term view of the nation's future, but Social Security has reduced many of them to one-issue voters. Clearly, keeping benefits flowing to one's bank account at all costs cannot be thought of as a broad or long-term view of the good of the commonwealth.
Similarly, young people currently "contributing" to the Social Security system expect benefits later in exchange for present sacrifices. This ropes them into a dependency relationship with the state as well.
With government benefits supporting us cradle to grave, we are less inclined to think about the future and more inclined toward present gratification. To explain why members of the younger generation think only of themselves, we do well to look at the ways in which public policy has subsidized that mentality.
Social Security has also contributed to the crowding out of private charity, an old and very serious problem associated with all state benefits. Why should private associations bother to solve social problems widely understood to be the responsibility of government?
The great tragedy of our age is that we have forgotten how to imagine the practical workings of a free and virtuous society. We have lost faith in our ability to solve difficult social problems on our own and have instead transferred our faith to public officials to solve our problems for us.
Nowhere is this more true than in the area of Social Security. Having a clearer understanding of the social, economic, and cultural costs of the program will take us a long way toward imagining a clearer path for the future, one that is more compatible with our moral ideals of family, community, and self reliance.