by Brother James

Created on: July 15, 2008

The problem with personal savings accounts with respect to Social Security is that such retirement funding vehicles are personal. Whereas individual savings plans such as 401(k)'s, pensions, and the like offer a greater promise of reward, there also lie an increased chance of loss due to investing in the inherently unstable stock market and ties to particular employers and their industries. An involuntary retirement during a bear market could lead to destitute circumstances. Likewise, an employee looking forward to a comfortable airline pension, (think United), may end up penniless. As such, the introduction of market based and employer aligned savings plans would pose an unacceptable risk.

The Social Security program's name implies its purpose. It is social, in that it involves people working in concert with one another. It is secure, implemented to provide a safety net for its recipients. Furthermore, it is insurance as opposed to investment. Customers who pay insurance premiums contribute towards funds that reimburse those who suffer financial loss. Drivers who pay auto insurance premiums do not (or should not) expect a financial windfall in the event of an accident, they seek only to be "made whole" and avoid financial catastrophe. The drivers whose cars are wrecked would not want payments subject to the ambiguities of high risk investments. Similarly, the 95% of the workforce who pay into Social Security contribute to current recipients and expect it to be there when needed.

Social Security has served America well for more than seventy years. President Franklin D Roosevelt signed it into law on August 14, 1935, and within two years initial payments were made. The success of government sponsored safety nets go back even further. Many European nations, particularly Germany, had established similar safeguards for their citizenry. The book of Genesis, in the Holy Bible, records a social insurance model adopted by ancient (17th century B.C.) Egypt. The leadership, upon the advice of a foreigner named Joseph, decreed that people supply a portion of crops grown during good years to store for use during lean years. The result was prosperity in Egypt during a world wide famine. The current model of Social Security, free of savings accounts, also works by people contributing while they earn income to help when they no longer earn income.

The system works. It is one of the most successful campaigns in American history. Throughout the years, more than $8.7 trillion has

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