When first reading the recent letter to Napa Valley Register on Social Security ("We must protect Social Security," Aug. 22) my reaction was pity: there goes another misinformed rube buying into the myth that the SSI taxes he pays is improving his ability to retire well. I had a good laugh, however, when I quickly realized that the author of the letter was none other than our Congressman Mike Thompson.
I had to ask myself, was the author truly so misinformed? Because if not, the only reasonable explanation for the letter is that the author must assume that his readers are so misinformed as to buy into the fairy tale. Sadly, I think the latter is more plausible.
The average Social Security recipient receives about $1,500 per month. That doesn’t buy you too much in the Napa Valley. For a person with a median income, it represents a return on investment of about 0.9% per year on the taxes paid. Given that long-term stock investments have historically returned 8-10% per year, this means the recipient is getting about 10 cents on his dollar. Wouldn’t $15,000 per month sound a little better?
Worse, money taken out of every individual’s paycheck is money that cannot not be invested in higher-yielding assets. Further, it reduces the amount of remaining funds available to invest at all. The net result has been that Americans, by and large, have not saved enough for their retirement. The average retirement savings of those between 50-55 is a mere $124,000. Trying to live on this amount means an extra $420 per month for the remainder of one’s life. Given the massive inflation being generated by our spendthrift Congress, that doesn’t get the average person anywhere.
The desire for a social safety net to protect the poor, disabled and dependent is universal. Virtually everybody agrees that it is a necessary function of government. But to think that Social Security is a reasonable retirement plan is a joke. Money paid into the system goes into the general fund and is immediately spent by Congress on other things, thus placing the burden of paying the unfunded liability to retirees on future taxpayers. In the private sector, this is called a Ponzi scheme.
Our man Mike is now asking for new taxes because the ability to cover expenses is running thin.
Finally, Mr. Thompson claims to be an “original co-sponsor” of the Social Security 2100 Act as if he is leading the charge. Don’t make me laugh. There are 220 democrats in Congress. 209 of them were “original co-sponsors” of this bill. Not a single Republican was included. Why do we keep voting for this guy?