`dawson's Creek' Has Enough Steam To Melt Most Viewers

3 Field Hockey Stars Named All-americans

By LAWRENCE W. REED
 Monday, January 19, 1998 &nbsp;&nbsp;&nbsp;&nbsp;Page: 





With Social Security benefits projected to exceed the system's revenues
within 15 years, young Americans are increasingly skeptical that the
government will take care of them when they reach their mid-60s. That's a
healthy development because in a free society, responsibility for one's
retirement is too important to relinquish to the vagaries of politicized
programs. &nbsp;&nbsp;&nbsp; 
 A recent report from the Board of Trustees of the Social Security Trust
Fund projected that payroll tax revenues alone will be insufficient to pay
current benefits as early as the year 2012. The system can draw upon its
revenues plus interest on the surpluses of previous years for a while longer,
but when that's all gone, we'll be staring gargantuan tax hikes in the face. &nbsp;&nbsp;&nbsp; We can't rule out the prospect of a reduction in benefits, which might come
in one or more disguises such as raising the age at which one can begin
collecting checks. This much is clear: trusting to politicians to take care of
you in your old age is costly, unpredictable, and therefore dangerous. &nbsp;&nbsp;&nbsp; 
 As a solution, advocates of the privatization of Social Security often
point to Chile's remarkable success in that very endeavor. But Americans need
not look any further than Great Britain for some of the same lessons. British
workers, optimistic about how they'll fare in their senior years, are
relishing the prospect of a pool of pension funds greater than that of all
other European countries combined. &nbsp;&nbsp;&nbsp; 
 A few years ago, Britain partially privatized its retirement program,
allowing workers to invest a portion of their payroll taxes in private pension
funds. While Americans are not permitted to invest any amount of their 12.4
percent Social Security payroll tax in private equities or retirement plans,
three-quarters of all British workers are enrolled in private plans through
their payroll taxes. &nbsp;&nbsp;&nbsp; 
 Since 1986, Britons have been earning double-digit rates on their
retirement funds while today's young working Americans must hope to live well
beyond the age of 100 before their "investment" in Social Security begins to
pay off. What's good for the workers is good for the Treasury as well. &nbsp;&nbsp;&nbsp; 
 While both Chile and Britain are valuable models, Americans have domestic
examples to learn from. Three counties in Texas had the good sense to get out
from under the Social Security pyramid scam years ago. &nbsp;&nbsp;&nbsp; 
 A loophole in the original Social Security law allowed municipalities the
freedom to opt out, an escape hatch Congress closed in 1983. Three Texas
counties took advantage of it while it was in effect and as a result, retirees
under the private plans in use there are getting several times the monthly
retirement check they would have received had they stayed in the government
system. &nbsp;&nbsp;&nbsp; 
 Recently, the Oregon legislature overwhelmingly passed a resolution calling
on the federal government to allow states to get out of Social Security. &nbsp;&nbsp;&nbsp; 
 Of course, those who worship government, and who think that you and I can't
be trusted to take care of ourselves, are working their PR machine overtime to
preserve the precarious status quo. &nbsp;&nbsp;&nbsp; 
 Would putting your retirement nest egg in the private sector be too risky?
The Cato Institute report, "Common Sense Objections to a Market-Based Social
Security System: A Response," shows that even if a worker invested his payroll
taxes during the stock market's worst performing quarters in history, he could
still retire better with private savings than with Social Security. Over the
last 70 years, a period that includes the biggest stock crashes in history,
stocks and bonds have averaged an annual rate of return of over nine
percent-far in excess of the average annual Social Security return of a paltry
two percent. &nbsp;&nbsp;&nbsp; 
 Would paying the cost of private pension fund management make the idea too
expensive? It's true that the government spends less to manage Social Security
monies than private firms spend to manage their assets, but that's because the
government invests poorly in its own low-paying securities. You get what you
pay for. Paying private managers to generate a far higher return is a good
investment, pure and simple. &nbsp;&nbsp;&nbsp; 
 While it is encouraging to see privatization of Social Security become a
genuine topic of wide discussion, every plan put forth so far retains a core
element of compulsion. "A privatized system," writes one prominent
limited-government advocate, "should require a mandatory contribution to
ensure that those opting out of Social Security are actually saving money for
their retirement." It's a sad commentary on the many decades of increasing
reliance on government that even many friends of freedom believe that
Americans might not save if the government didn't order them to. &nbsp;&nbsp;&nbsp; 
 Social Security, make no mistake abut it, will ultimately be privatized
partially or wholly. America will not forever lag behind Chile and Britain
just so it can maintain an antiquated and politicized pension system that's
headed for bankruptcy. It's time that Americans take back a responsibility
they should never have trusted to government in the first

Move Social Security Out Of Government's Hands