The Bush administration has chosen the wrong time -- if ever there were a good time -- to restate the president's preference for allowing Americans to allocate retirement dollars into the stock market rather than into the Social Security system. The precipitous decline in the market over the past year demonstrates precisely why it is not a safe haven for retirees. When even savvy investors are watching their holdings churn down the drain, it is unrealistic to expect average Americans to make appropriate investment choices -- especially considering the number of corporations whose leaders have shown themselves to be less than frank about their companies' balance sheets.
This is not to say that the stock market is an unwise investment. Of course not. After all, the right and ability of private citizens to own the means of producing goods and services is what makes our capitalistic system work.
But for presidential press secretary Ari Fleischer to say, as he did last Wednesday, that "young people are paying taxes in now for a Social Security system that is going bankrupt," is at best simplistic and at worst inflammatory.
Strengthen Social Security
The key is to strengthen the Social Security system not drive it into the ground. After all, Social Security doesn't just pay retirement benefits, but provides survivor and disability benefits that depend on a sustainable stream of financing. Diverting funds from Social Security to private investment plans will have a deleterious effect not only on the system's retirement plans, but also on the funds needed for those permanently disabled or for the children and spouses of those under the system who die.
Those who have considerable discretionary income have the ability to invest those extra dollars as they see fit and withstand the risk of their own decision-making. But many Americans are not now, nor are likely to be, in that position -- especially as private pension funds dwindle or are eliminated. Social Security is their only retirement option and should be sustained.