That’s how it’s always worked, dude.

McCain Gets a Third-Rail Shock - washingtonpost.com

In remarks at a town hall meeting in Denver on Monday, McCain laid out what he likes to call “a little straight talk.”

“Americans have got to understand that we are paying present-day retirees with the taxes paid by young workers in America today. And that’s a disgrace. It’s an absolute disgrace, and it’s got to be fixed,” he said.

Reaction to McCain’s statement was slow to build, but fiery when at last it came yesterday.

“What I don’t understand is why reporters don’t ask: If Senator McCain doesn’t want payroll taxes to fund Social Security (as has long been the case), then how does he propose to pay for it?”

I’m not going to pound the table about “absolute disgrace.” Maybe that can be explained away. Fine.

But what he said conveys a real lack if understanding of some basic realities. Makes him seem out of touch.

Comments

  1. Hans wrote:

    Isn’t that how it works everywhere in the world?

    Posted 10 Jul 2008 at 3:38 pm

  2. Alon Levy wrote:

    Nope. In Singapore there are private retirement accounts. What you get at retirement is exactly what you put in. If you leave aside problems like the 70-year-olds who have to scrub floors to survive, that system works remarkably well.

    Posted 10 Jul 2008 at 3:57 pm

  3. John the Marine wrote:

    Chile and Sweden (Yes, umber left Sweden) have private retirement accounts also. Hey, maybe we could bring back Al Gore’s “lock box” approach to protect Social Security. More realistically we probably should just forget about it being around at all when we come of retiement age.

    Posted 10 Jul 2008 at 5:22 pm

  4. canuckistani wrote:

    I’d think more of private pension plans if the executives of Enron had been stripped of their assets to refund their employees pension contributions.

    Posted 10 Jul 2008 at 5:34 pm

  5. John the Marine wrote:

    I’d think more of private pension plans if the executives of Enron had been stripped of their assets to refund their employees pension contributions.

    Apples don’t = oranges Canuckistani.

    The programs being used as examples above are government programs (which I know you love) that are based on privately owned accounts (which I love, something for both of us), not corporate sponsored 401k’s or other corporate controlled retirement plans.

    Posted 10 Jul 2008 at 5:52 pm

  6. Alon Levy wrote:

    Sweden isn’t strictly comparable to the US, because it has a very lush welfare program. If you make under a certain amount - I think the equivalent of $14,000 per year, but I’m not completely sure - the government supplements your income to that level. In addition, the government provides free health care, reducing the expenses of seniors. I’ve always contended that the US could safely privatize social security, if it provided some kind of livable means-tested income support instead.

    Chile I’m less sure about the details of, but its general post-1973 social policy has been a disaster. In 1973 its poverty rate was 20%; under Pinochet it climbed to 40%, and despite vigorous growth since 1986, that rate has remained the same since. I suspect that if you go to the non-touristy parts of Santiago, you’ll find the same 70-year-olds scrubbing floors that you’ll find in Singapore.

    Posted 10 Jul 2008 at 6:17 pm

  7. John the Marine wrote:

    I’ve always contended that the US could safely privatize social security, if it provided some kind of livable means-tested income support instead.

    Out of the frying pan and into the fire. Replacing a broken entitlement with a welfare program isn’t progress. I’ve always contended that Americans need to accept that being free means being responsible for one’s own affairs and not insisting the government take care of us.

    Posted 11 Jul 2008 at 6:26 am

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