By now, it is commonly known that 2005 will be the year of Social Security and, perhaps the foundation of the legacy of President Bush. As it stands, Social Security is caught between Scylla and Charybdis, as many Americans refuse to see the problem while others simply believe that the problem does exist but it shouldn’t be up to the government to fix. That the government should not assist and maintain a program that helps its elderly citizens survive is simply against the spirit that makes this country great.
“Give me your tired, your poor, /Your huddled masses yearning to breathe free, /The wretched refuse of your teeming shore. /Send these, the homeless, tempest-tosed to me, /I lift my lamp beside the golden door."
The nation cannot be great if its elderly are hungry. The nation cannot tell the rest of the world to give their wretched refuse of the teeming shores and ignore the realities of life. On the other hand, there has been an ongoing sense of entitlement that says the government must provide benefits even if it is unable to. Here again, there has to be a sense of reality, which brings us to the notion of private accounts as part of the payment Americans already make toward Social Security. It is an idea that must come to pass. In addition to self-directing one’s own assets, there are components to Bush’s plan that would create inheritance for wide swaths of the nation’s population that, heretofore, would have nothing to leave behind for their heirs. It is time to allow Americans to play an active role in the money they earn.
Forget the negative propaganda that harps on the implosion of Enron and its messy aftermath. It is but one of thousands of publicly traded companies. A more realistic way to assess the value of the stock market is to look at the returns of the major stock market indices versus the returns on bonds (currently the Social Security Trust Fund is limited to short- and long-term Treasury bond investments). Another way to assess the potential of a plan that allows for investing in stocks is to look at the 40-year price history of Coca Cola’s stock, or a 30-year chart history of the underlying shares of Wal-Mart and Boeing. Or, check out how the second richest man in America got that way. (Hint: it had something to do with investing in the stock market.)
Obviously, there are no guarantees with the stock market, but not doing anything guarantees disaster for my children and yours. The government can’t just print money to solve the problem. There is a comprehensive solution, and the major component of that solution is to trust that Americans will look after their hard-earned money better than the U.S. government has.
This weekend our Business Block has much more on the Social Security dilemma. Tune in Saturday 10am - noon ET.
Charles Payne is the founder and CEO of www.wstreet.com and appears regularly on FNC's Cost of Freedom Business Block.
Charles Payne is the host of Making Money with Charles Payne (weekdays 6-7 PM/ET).