The Best Laid Plans - Podcast Transcript

November 2005

The following transcript is for the podcast entitled “The Best Laid Plans.”

Welcome to the PACT America Podcast.

I've got good news. The local newspaper is going to be doing a story about me and my efforts, and it will be included in a special feature called "Heartbeat: Explorations of the Human Spirit." When it comes out, I'll be sure to scan it and put it on the website.

Anyway, I'd like to discuss a comment that I received recently. It comes from a man who would like to opt-out of the Social Security system. He doesn't want to have to pay in Social Security taxes anymore, but at the same time, he doesn't expect to receive any benefits. He wants to manage his own investments, because he can do a better job of handling his money than the government can.

And there's some truth to that.

But it's never going to happen.

You know, right know the taxes we are paying in are used to pay the benefits for the current generation of retirees. The government needs that money, and it needs it right now.

(sigh)

Too often, people look at Social Security as a retirement program and try to analyze the investment returns. But it's an insurance program. You know, it says that no matter what else happens, when you retire you'll receive a basic benefit that will help keep you out of poverty. It's a safety net. So it's not glamorous, but that's what it is.

Do people analyze other types of insurance?

Do you look at what you pay in for car insurance and then compare that to the claims, and say, "Hey, I made a 5% return on my car insurance premiums?" No.

You know, look at it this way. Let's say you've got fire insurance for your home. Would you rather be the person whose house burns down? Yeah, they get big check, more than they've ever paid into the system, but at the same time, they're not going to be doing too good. Or would you rather be the person who pays in over the years but never really needs it, you know, because they get to keep their home?

And that's an extreme example, but maybe it will help you get started in thinking in the right direction. Because higher earners right now, they pay into the system, and they don't always get as much as... I don't know... what lower earners do. And you know, I'm opposed to raising the tax level, because we don't want to start just penalizing these higher earners; we've got to make sure that it's somewhat equitable for everyone.

But at the same time, you have to realize that given the nature of the program, and given that it is an insurance, you're never going to get as much as you put into it if you're at that higher end of the scale.

So let's assume that you really could manage your own investments, that you really could opt-out of Social Security and start buying stuff like stocks and bonds and real estate. You know, I think that would be good for some people, but what if your investments didn't work out so great?

Or look at it this way. There's a famous saying that goes like this: "The best laid plans of mice and men often go awry."

Let's say you had some unencountered problem or unforeseen difficulty. Maybe your business went bankrupt. You know, maybe those assets wouldn't be protected under bankruptcy law, and you could lose a lot of it. Or let's say you had an unexpected medical problem. Even with health insurance, a major illness could wipe out your entire life savings.

So there's a lot of situations that can and do happen on a regular basis that would wipe out all these gains. And the good thing about Social Security is that you pay into the system and it protects you from all this stuff. You know, when you retire you're going to get that check no matter what else happens to you during your lifetime.

(pause)

Now you may be thinking, "Well wait a minute. Social Security won't be there for me. It will be bankrupt long before I need it."

Well that's not true. See, right now, the taxes that we pay are being used to pay benefits for the current generation of retirees. But when we retire, the next generation will pay in taxes, and those taxes will be used to pay our benefits. So as long as there are still American workers who have jobs and are paying taxes, there will always be money coming into the Social Security system.

Now what projections are showing is that... I shouldn't say that benefits will need to be cut, but here's what will happen. Right now, there's something called a Cost-Of-Living Adjustment, a COLA, which means that each year, Social Security benefits increase based on the level of inflation.

Now what will probably happen in future years is the system won't be able to afford to continue to pay out these Cost-Of-Living Adjustments at the rate that they are right now. So it's not that benefits will be cut, it's just that they won't continue to grow at the same level that they have been.

And I could get into a whole long speech about this or... It will start getting really complicated, really fast. But hopefully that will... I don't know... clear a few things up.

But let's move on to a different subject.

I received some feedback about a previous podcast, the one where I said that I quit my job. People wanted to know why I was so upset that we're exporting these jobs when I didn't even like the job. You know, what's the loss if we're losing these jobs that nobody wants to do?

Well no, I think you missed the point. It's not that I didn't like my job. I enjoy fabrication work. Welding is kind of fun, you know. You're melting molten metal together; that's cool.

But at the same time, yeah, it is a production environment; there's going to be times when you get bored or it's boring. And during those times, it seems like I couldn't help but thinking about some of these other issues.

You know, right now the corporation is making record profits. But at the same time, they're paying us record low wages. So these executives are patting themselves on the back and awarding themselves these million dollar bonuses, but is it really that much of a success when a lot of these profits are coming on the backs of your workers? I don't think so.

People, people say to me, "You know, nobody is forcing you to work there." That's true, but there just aren't that many jobs out there right now.

Or, "Go back to college!" Well not everybody can just go back to college, you know? Not everybody has a scholarship or someone who is willing to pay for their education. You know, a lot of us have to work our way through school.

But what's happening when you can't even get a decent job? You know, I want to work. I want to work hard. But at the same time, I want to be paid for that work.

You know, the American Dream is not about owning fancy cars or big houses; it's about being able to provide for yourself and your family. You know, to own your own name. It's an idea that through hard work and sacrifice and dedication to your goals, that you can make a better life for yourself. That's the true American Dream. That's all it ever was and all it ever will be.

But when that dream, the true American Dream, dies, America dies with it.

(pause)

You know, not everybody can be a doctor, lawyer, or engineer. People in business suits don't make the world go round. It's the guys and girls driving the trucks, loading the docks, swinging the hammers, and... welding.

And what happens when the society that you create only enables those at the top to have a good lifestyle? Should we be so proud of ourselves when you need a college degree just to take part in the American Dream? I don't think so.

And what's happening is that it's no longer accessible to a lot of us because these jobs aren't paying enough to... (sigh)

I don't know. It's really frustrating.

You know, we could make a lot of this stuff in America at a profit. But the problem is these corporations can make more profit by going overseas or doing other... some of these other practices.

And I guess... I don't know. Where I worked, I felt like company is bending over backwards to please the shareholders, but all the shareholders care about is money. You know, at the first sign of weakness, or if the company ever has problems, they're going to sell.

Your employees, your workers would be loyal to you if you're loyal to them. You know, we're not just going to walk out the door if the stock dips a couple of points. So where are your priorities?

(pause)

You know, Social Security is a promise between generations, but it's not the only promise that we need to protect. And like I've said before, the investment we need to protect is not the one printed upon the paper of stocks and bonds, but the one engraved upon the hearts and minds of a generation.

What's happening to America? What are we doing?

You know, it doesn't have to be this way; we can make it good for everyone. And I guess that's what I'm trying to do.

This is Adam Florzak keeping it real.