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HappySqurriel on 02 July 2010
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richardhutnik said:
HappySqurriel said:

Personally, I find the argument that cutting back on government services is necessarily going to have a negative impact on individuals to be bizarre. Most governments are horribly inefficient organizations that are plagued with debt, have significant corruption, are subject to widespread fraud, and spend a large portion of their money in areas they shouldn’t be involved in. If the government was reduced to its core functions and focused on doing those efficiently while reducing corruption and fraud (and staying out of debt) you could probably run the government on 5% to 10% of GDP while the typical citizen didn’t notice any reduction of services.

Until you throw out medicare, medicaid and social security.  I assure you that a bunch of seniors no longer getting social security will result in something really ugly going on. 

So, look over this pie chart and say what you are going to cut:

 


Being that the "Assets" backing Social Security are (essentially) a bunch of IOUs from a government which is rapidly approaching bankruptcy, what makes you think that Social Security isn't going to disappear? How does the return on investment of Social Security look compared to (pretty much) any private investment? In what way is Social Security any different than a Ponzie Scheme?

There are ways to achieve the goals of Social Security without having the government manage the program for everyone. While this wouldn’t be my first choice, the government could mandate that an individual must invest 5% of their income (through a payroll deduction) into a registered retirement fund, people would have a choice on where they invested it, there could be a default fund set up for people who didn’t want to manage their own money, and this investment could be tax-deductible up to a certain value (say $20,000 per household). While for low income earners this might not completely cover their living expenses, I’m positive for someone who worked for 40 years it would produce a larger payment than Social Security.

Medicare and Medicaid will be interesting to see, because by the 2016 (or 2020) election these systems will be facing a crisis because their expenses will have increased much more rapidly than government revenues; and the government will be collapsing under its own weight.