Tuesday, September 23, 2008

The inmates are running the asylum

I want you to think of the least financially responsible person you know. Got someone in mind? Good. Likely, that person exhibits some of the following behaviors:

*Spends money frivolously
*Cannot effectively manage a budget
*Spends more money than they earn
*Finances big purchases through credit, without the means to pay off the debt
*Uses debt to pay off other debt

Would you put that person in charge of a business? No? Me neither. Why then is one of the world's worst offenders in this regard in charge of the U.S. Economy? Of course, I'm talking about the federal government.

Obama is using the current financial crisis to blast McCain's plan for personal retirement savings programs. He essentially argues that if people invested in some of the failing financial institutions, they would have lost a lot of money toward retirement. Apparently, he thinks the money should be given to the federal government so that it will be taken care of for those of us who are too dumb to save for retirement on our own, and who would have blown their retirement money on beer and cigarettes.

Well, there's a big problem with that argument. While beer and cigarettes are terrible investments, they're arguably better than nothing. Which is precisely what my Social Security witholding is getting me. I'd be better off burning 75% of the money that goes into Social Security, and keeping the rest than if the government held on to twice as much as it does now. The government isn't taking care of my Social Security money. It's squandering it, like it has for decades.

Those of us who pay Social Security taxes every paycheck are footing the bill for those withdrawing now. As the population ages, fewer people will be paying for more people. It's only a matter of time before Social Security runs out of money, and everyone knows it. But rather than face the difficult solutions demanded by reality, politicians bury their heads in the sand and talk up their "committment" to Social Security.

If you were the CEO of a business, and your business lost hundreds of billions of dollars once, you'd probably be fired and/or your business would be bankrupt. The government's done it consistently for decades, yet people can't wait to give it $700 billion more dollars on the hope that it will finally work this time.

Roulette has better odds of success, and the risk we're taking with this bailout plan has more in common with the Russian version.

1 comment:

The Raple Wifey said...

Interesting points. What scares me is the mentality that if you don't want to pay out Social Security that you are not "willing to help others" or are "stingy." Or simply, that you "don't know what it is like to be w/o." Well, BS on that. Here is my thought: most people who completely depend on Social Security in the end are not really w/o, and most never have been. They spend lots of money going out to eat, buying things they don't need, frittering money away. It's true that lots of us do that, but...guess what...some of us ALSO plan for retirement. I think SS should be optional. If you can't save on your own, then have the government take a portion of your check each pay day and put it away for you. You can draw it out at retirement. Don't take my money though, I'm going to put my money in an interest bearing account and save on my own. I can take care of it. Even if I ended up single without any family to ever help me again--I would still save away--on my own. This would also cut down on those very capable people who have zero earnings, yet draw Social Security. I guess it would just be a speed bump in their scheme to milk the system. I'm sure they would find another way. My dad always says, "It's not what you make, it's what you keep." So to all of those who think we need to bail everyone out...