Creating the Perfect Retirement

I confess to bias. Not everyone will make that confession, but a bit of scab-picking will quickly confirm that all of us approach political issues with bias. That’s why I liked the State of the Union speech and many didn’t. I got what I came for and then got a whole lot more when I paid attention to the details. Then again, some hated every word, relished every smirk, fixated on the “puppet-master” Cheney behind the speaker whenever he smiled or applauded. They waited for the rebuttal—finally an appropriate response time, rather than the non-sensical “pre-buttal” of the day before. They got what they wanted as well.

Two issues were central to the speech; the war on terrorism and the question of Social Security. All of the arrows were plucked from the progressive (nee liberal) quiver when the Iraqi election came off so well. Now, they could continue to assert their quixotic demand for “detailed timeline for democratization and withdrawal” and a firm estimate of the cost of the war—imagine making such a demand of FDR in January of 1942! Neither request can be met rationally and therefore the demands provide an excellent platform for appealing to the party base who never get encumbered by fact.

Social Security, however, gains a lot of leverage with the populace. Everyone is a player and has an interest. The elderly fear for reduction in benefits. The middle-aged want to protect their investment. The business owners want a change to the burden they bear in funding their contributions for their workers. The young want justice in expecting a return for the payments they are forced to make. Everyone has a dog in this hunt.

That’s why I liked it when the President emphasized that no one over 55 years of age would experience any change in their entitlement. Start by assuring those most prone to fear that they aren’t going to be damaged. Hopefully the older folks were listening and they believe.

Then, despite the discourtesy of the left side of the chamber, the President clearly delineated a time table. By 2018, the input contributions will no longer equal the output payments. That’s not a long way away and the exact date could be debated, but it is definitely within a small plus-or-minus variant. By 2042, the choice becomes more critical. There is no more surplus, excess, trust-fund, or shock-absorber capability. The choice is cut benefits—and politically, that isn’t a choice at all. Again the exact date can be debated, but the inevitability is unquestionable.

Conclusion has got to be that action is necessary. The rebuttal, however, seems to be simply to continue to snap our fingers and keep the elephants away. No elephants? See, it’s working.

The President then struck to the philosophical heart of the progressives. He cited a litany of liberal saints who have recognized the problem and suggested actions. How can poor, dedicated, sycophantic Nancy Pelosi possibly argue against Roosevelt, Moynihan, Kennedy, et al?

Then, he offered a menu of options. He was not proposing a solution but merely outlining a range of alternatives for a start to discussions. We can cut benefits, change indexing, delay eligibility, offer investment alternatives, or maybe a combination of cures. But, we must begin to speak productively. How does Harry Reid confound the mature logic of that, does he recall a ten-year old in Searchlight and seek wisdom from the mouths of babes?

Finally he pulled the plug on the arguments of the risk of partial (NOT total) privatization. He set a 4% of contributions limit. He offered limited fund choices. He suggested a market threshold for federal intervention to protect. He described a final years safety-net to insure that no one suffers a retirement fund collapse on the eve of eligibility. Anyone who listened, could see that this was far from a risky proposal and most assuredly had considerable safeguards built in.

In all, a tour de force that left the progressives gasping at straws to rebut. The empty rhetoric and emotional appeals that followed from Reid and Pelosi must have struck home somewhere, but my suspicion is that their audience was somewhere else watching re-runs of sitcoms or maybe MTV beach-blanket competitions.