Addressing the Social Security Crisis

news Addressing the Social Security CrisisIf we want to save Social Security for future retirees, we as a society should do what we can to encourage saving now. I hadn’t thought of it that way before, that my personal saving and getting out of debt will help fuel the economy which will enable retirees in 2020 and beyond to live in comfort. It is an excellent point made in a short article posted last February in Slate, and one I am taking to heart.

The debate about private accounts proposed by the Republicans may be dead, but the essential problem is the same. With the current (negative) rate of savings in the U.S., it is difficult to see how we will grow the economy to the booming levels we’ll need to support the increasingly older and retired population. As I discussed before, I refuse to get all worked up about this issue, since I believe that I can’t personally do much to change society as a whole. What I can do is personally save, and teach my children to do the same. The article puts it very well:

There’s not much we can do about dictating the work habits of people in 2020. They’ll choose their own work habits, and they’ll pass their own laws to try to influence each others’ work habits. That means the only thing we can do now to address the underlying crisis is to encourage saving, because saving means investment, and investment means that when 2020 comes around we and our descendants will have more and better machines and factories to produce more and better food and aspirin and television sets.

In other words: If you want to address the Social Security crisis of the future, you must adopt laws that encourage saving in the present. There’s nothing else you can do.

This article has changed my thinking to realize that my personal committment to saving is not selfish at all, and in fact is a net good for society. That makes it a two-time win, and you can never have enough of those.

Link: Save and Save and Then Save Some More (Slate)

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