The lesson one might learn from “Crime and Punishment” is that doing wrong in the pursuit of good is still wrong and, in the end, only leads to more suffering. Perhaps this is not always true, at least in our limited view of the ultimate consequences of our actions, but what of the cost to our own humanity, our own souls? This question is put forth in consideration of the charges of selfishness and greed leveled by some who support Welfare, Social Security, and other government programs intended to redistribute wealth against those who do not support such policies and programs.
The arguments for wealth redistribution are numerous. The rich are obligated to help the poor, the rich became rich by exploiting the poor, it is not fair that some people are rich and others are poor, or the poor need assistance or will suffer in squalid conditions or possibly even starve to death.
This list could go on and on just as the list of arguments against wealth redistribution: that it turns one’s abilities into liabilities and another’s needs into assets, that it robs one of the right to enjoy the fruit of their own labor and tramples on their property rights, that it creates a permanent underclass with no incentive to contribute to society, that it drives away companies to other countries where the taxes necessary to sustain such a welfare state do not exist, and that it gives political power to one party with no real interest in the poor but who use them to take and keep power.
Whichever side you take, one obvious truth presents itself: we still have the poor among us. So clearly what we are doing now, and have been doing since the whole idea of the Great Society flowered like a stinkweed onto the American landscape back in the 1960s, isn’t working. At least not by any reasonable standards as it has been 40 years and at least two generations and, by some standards, things are even worse than before. So perhaps those against the redistribution of wealth come closer to the mark than those who approve as, ultimately, such redistribution creates a drag on the economy by punishing success.
One’s own motivations for wishing to keep what they have worked for is irrelevant. Be it greed, a lack of concern for the welfare of their fellow man, or simple ignorance of the situations of others they still have the right to anything they have worked for themselves. However, I do not believe those opposed to government redistribution of wealth are so self-absorbed, so callous, or so blind. Some are, perhaps, but the vast majority simply see a better way.
Take Social Security, for example. Every time I write a column that questions the conventional wisdom of Social Security, somebody inevitably calls me greedy and claims that I don’t care about the poor. On the contrary, I care very much about my fellow man. Which is exactly the reason I am so dead-set against Social Security as a retirement plan and, again, offer a better plan where you take the money that government takes from you (6.2% of your salary), plus the amount government forces your employer to match (another 6.2%) and invest it into the stock market.
Consider the following example of a guy named Joe as we follow him throughout his life on the road to retirement.
This coming summer, just before his senior year of high school begins, Joe quits at age 17 and starts working immediately. By that time, the Federal Minimum wage will be $7.25, which is what Joe starts earning. But since life isn’t fair, Joe is going to have a hard time of it. Not only does he earn minimum wage but he never, ever gets a promotion or raise of any kind. And, in an even more unlikely suspension of disbelief, the government will not interfere during Joe’s whole lifespan and minimum wage will never increase. It’s going to stay at $7.25 forever.
But I’ve got even worse news for Joe. According to the National Center for Policy Analysis, “the stock market’s worst average annual real rate of return for 65 consecutive years was 8.5 percent.” Again, that’s the worst it has ever done. But in this example let’s make it even harder for Joe and slice that figure in half to 4.25%. Ouch! Joe isn’t doing very well. Or is he? When Joe retires, even after never getting a raise, even after earning only minimum wage his whole life, even after getting only half of the worst-ever average stock market rate of return, Joe will still retire at 67 with $285,147 in savings. Sure, it is just over a quarter of a million dollars. But the interest alone on that amount would pay Joe $12,118.75 a year for the rest of his life. Considering the fact that taxes are less on seniors, Joe would actually have more in his pocket than he did while working and earning minimum wage.
Of course, that example is the worst-case scenario. Leaving all other considerations the same but giving Joe the worst average stock market return, rather than just half that amount, Joe would retire with $1,206,946 at 67 which would pay him nearly $50,000 a year in interest.
What does retirement under Social Security mean for Joe? His monthly benefit under Social Security, calculated in today’s dollars just as the above plan was calculated, is $794 per month or $9,528 per year. Even in the worst-case scenario of half the worst stock market rate of return, Joe comes out $2,000 a year better investing his own money rather than letting government handle his money for him. But if Joe earns at least the worst average rate of return, he gets a little over $4,000 per month; five times — yes, five times — what his Social Security benefit would pay.
Objections to this idea would be numerous. The first would be that people cannot be trusted with planning for their own retirement and that government must do it for them. Sadly, I must agree with at least a portion of this statement. Some people truly would not set aside that money even though it is an amount they now never see anyway because government takes out before they even receive their paychecks. To this I would first suggest that saving is their responsibility and if they fail to do so it is none of my business. But there are too many opposed to personal responsibility and accountability, so I would therefore merely suggest passing a law that forces people to save it, or perhaps has the employer take it out beforehand (just as it is done now) but placed in an account that is in the individual’s name but that the politicians do not have access to. It could be set up to be untouchable until retirement.
Others would question what happens to Social Security disability benefits. Those could be covered by a new, small tax that would protect those people who are injured or become disabled. There is no need to have Social Security disability tied to Social Security retirement. The benefits of having your retirement under your own name would far outweigh the minor costs associated with a new tax for disability protection.
Still others, especially now, would bemoan the current state of the economy. But that reveals little more than shortsightedness. Through the long lens of history, we see that over time, especially over an entire lifetime, the stock market outperforms Social Security. And if the entire economy somehow collapses then government won’t be able to meet its promises of Social Security benefits anyway.
These objections, however much or however little merit they may contain, nevertheless pale in comparison to the benefits such a plan would offer. It gives everybody a stake in the economy. And more importantly, if you die early Social Security won’t leave a quarter million dollar (worst case) or a million dollar plus (better case) legacy for your family. This money can be used to build not just more wealth but to build lives. The children or grandchildren of the first generation to succeed under this plan can have new avenues open to them that were previously impossible or very difficult. Money for college, to start a business, or just to improve a family’s standard of living would become available, which is something Social Security cannot do.
So, if anyone is truly interested in helping the poor instead of just trying to punish the successful, then this plan is the way. Legitimate questions and criticisms are welcome as they can only serve to help find the imperfections and improve upon the plan and, in the end, improve lives. But if you just don’t like successful people and want to punish them, then you have little to contribute to the discussion beyond simply deriding the idea as the fancy of another greedy conservative.
Jeff O’Bryant is an amateur historian and holds two degrees, a bachelor’s in education and a bachelor’s with honors in history. He can be contacted at jeffobryant@catt.com or through his blog at rightnewsandviews.com.
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