So of course the benefits reduction topic is hot again. Today there is an article that mentions benefit reduction in Europe and is compared to the USA social security model.
I tried to post this comment and a few variations, but for whatever reason, the administrator of this article kept removing my comment. It is not extreme, so I have no idea why it kept getting removed. Anyway, my 2 cents:
I am all for ending social security, but end it sooner than later. It is a depression era relic where the original people who received benefits never paid into the system. It garnered votes for the election, but it didn't make much long-term financial sense.
If benefits are going to be reduced, reduce them now for EVERYBODY, so that everybody has to have skin in the game for the decision. Politicians always cut benefits for later generations, because it is easy to disenfranchise a populous which does understand the true importance of voting, and who discount the importance of their entitlements because they won't be received for 30 years, and so don't bother. But this is dishonorable. Many older people support this decision because "they've paid into the system for all these years," and lets face it, what do they care, they will get all of their benefits at the expense of the young. But, what do you think we are going to have to do? The difference is that you will get all your benefits and the rest of us will be left holding the bag. So if benefits need to be cut, then EVERYBODY should have to have their benefits cut at the same time. None of this repetitive 'Oh, let's raise the retirement age 4 years for those retiring twenty years from now.'
I have also encountered some debates, such as commentary on Businessweek, similar to this article that says, "Hey, if you've saved too much and you have a nest egg, then you don't need social security." Well obviously then the only reason why they won't 'need' it is because they have made responsible decisions throughout their life. If one is cut out of the benefits, then he or she has paid more taxes than 'advertised' over a lifetime and ends up subsidizing those who chose to live a life of debt. If something like this gets passed, what do you think is going to happen? A phrase learned in Economics 101, but which people always seem to forget is that people respond to incentives. People will stop saving. I know I would. I live below my means so that I can pay down my student loan debt and max out my 401k and Roth IRA. But if the incentives are skewed so that I get punished for saving, you can bet your ass that I am going to spend that money on a Porsche instead.
Probably the main problem in this country is that responsibility is not rewarded, but irresponsibility is - repeatedly.