The haves and the have nots... feelings of jealousy about Social Security

We were in Boston today to check out the tall ships. When the kids tired of ship-gawking, we decided to wander from the Seaport area over to Faneuil Hall to poke around there for a while. The sun was beating down on us as we made our way through the crowds along the waterfront. We passed this great little oasis of green behind a black iron fence adjacent to the chichi Boston Harbor Hotel. Behind the fence, lounging on comfortable chairs and chaises, dangling their feet in what appeared to be just the clearest and most refreshing pool one could imagine, were about a hundred or so people. Being the curious and serially distractible person that I am, I surveyed the scene and made a quick assessment of those assembled, and reached a quick conclusion: There did not appear to be a single person behind that iron fence that was less than sixty years old.

And it occurred to me… who else but someone in that age bracket could afford to be dropping $500 a night for a hotel room with everything that’s going wrong with the economy right now?

And I could feel it rising up in me… just the slightest feelings of resentment and jealousy. At 45 years old, I’m on the wrong end of the Social Security Ponzi scheme. Everyone who has done the least amount of research understands that there is no Social Security trust fund. The 16% of my wages that come off the top (half paid by me, half by my employer, which these days is me) don’t go into any fund at all. They are mailed over to those people who are collecting Social Security, like my own parents, and the well heeled people behind the iron fence.

Calling Social Security a Ponzi scheme is not an exaggeration. It really is no better than what Bernie Madoff was just sent to prison for doing. A system that was set up to start paying at 65 when the average life expectancy was less than that is not sustainable in a world in which that life expectancy is now well north of 80.

In spite of the recent hit to their stock portfolios and real estate holdings, as a whole, older folks are in the best shape of all of us. This is not meant to imply that all old people are rich. They aren’t. However, despite the great reliability our elected officials have demonstrated in pandering to retirees, those feelings of resentment I referenced above are bound to become more common, especially when what is now 16% needs to creep higher to meet the needs of an ever expanding number of Social Security recipients.

GM just went belly up because of its failure to deal with its pension costs. If the US government goes the same route, we all will have dropped turkey all over our feet. The time for real Social Security reform is upon us, and thoughtful older people will understand that they need to support that reform lest that system go the way of GM.