The Systems View, Part III: The Advisability of Social Security "Reform"

The Systems View, Part III: The Advisability of Social Security "Reform"

Summary

In Part II of this series, we saw seen how the money in individual retirement accounts is, in effect, destroying our economy, our environment, and our health. In this post, we'll discuss the impending disaster that is being planned under the name of Social Security "reform".
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by Eric Armstrong

Like the idea of instituting personal retirement accounts for public employees instead of pensions, the idea of privatizing Social Security is a monumentally bad idea. Instead of the billions that are currently in the hands of financial management companies, they will control trillions.

Right now, the billions controlled by financial management agencies force corporations to favor short-term results over long-term thinking. But when they control trillions, corporations will lose any pretense of long-term planning. They'll have to focus on quarterly profits pretty much to the exclusion of all else. So from a General Systems perspective, the idea is just horrible.

But even if you're thinking about your own retirement and nothing else, the Bush plan for social security "reform" is just plain bad. It would be more accurate to call it, "Social Security Destruction".

If you like that plan to secure your own financial future, you have to take it as an article of faith that, since the stock market has always gone up over the long term for the last hundred years or more, it therefore always will. But now is a particularly bad time to make that bet:

Impending environmental scarcities suggest that, sometime in the next 25 to 50 years, the economy may begin a rather precipitous decline.
A variety of corporate practices are increasing profits in the short term (making stocks go up) in ways that are ultimately detrimental to the economy (which will eventually make them come down again). Those practices include runaway tax dodges, off-shore labor, off-shoring of intellectual property, and layoffs.
For the moment, corporations are finding ways to cut costs even further, but there comes a point when the turnip has been bled to death, and there is no more blood left to give.
To engage in his foreign war, Bush has turned a $5 trillion dollar projected surplus into a $5 trillion dollar deficit. The deficit spending has been financed primarily with foreign capital.
The money that's coming from all that foreign borrowing is making the economy look good, because corporate profits are up. But it's not translating into a fundamentally sound economy, because the money isn't making into workers' hands.

In other words, our recent economic "growth" is liable to turn out to be a bubble that future generations may still be paying off long after we've ceased to care. At that point, dollars invested in the stock market may well have turned into pennies, taking with them any chance of a reasonable retirement.

About Eric Armstrong

Eric Armstrong is computer systems designer, writer, and philosopher. He is currently working on a book that uses the principles of General Systems Theory to explain how America's epidemic of obesity and disease stems from profitable, but unhealthy, ingredients in the food supply; how the corporate financial system (and our own retirement plans) are complicit in the problem; how the American political system allows it to happen; and how our problems with the environment, a dwindling standard of living, and even our problems with the global economy all stem from the same constellation of systemic interactions. At www.treelight.com/health, he focuses on nutrition and fitness. At www.citizensAdvisory.org, his forming non-profit is working to get the money out of politics. At www.artima.com/weblogs, he writes about software, web technology, and development tools.

About Citizens' Advisory

Corporate money has hijacked the ballot box. The Citizens' Advisory aims to take it back. Our goal is to put people in charge of the political process. The voting-advice system recommended by the Citizens Advisory lets people choose advisors they trust. Done right, that system will enable multi-party coalitions in cyberspace. The system appeals to voters because it's convenient. It appeals to social activists and their organizations because it levels the political playing the field and empowers them with a stronger political voice.