Social Security - It's More Than a Matter of Political Correctness

Gail Collins, in a New York Times Op-ed, lambasted Alan Simpson, a Republican and co-chairman of the President's deficit reduction commission, for referring to Social Security as "a milk cow with 310 million tits". This, says Collins, confirmed that Simpson is indeed sexist and bashes seniors constantly, as was claimed in an article on Huffington Post. She goes on to make some tongue-in-cheek proposals on what should be done to prevent Social Security from collapsing.

If the op-ed was only a matter of political correctness and the use of the word "tit", that wouldn't matter too much (if you want to hear the word in a hilarious context, check this out until its end!); but the issue is that, once again, opinion makers pamper to senior citizens' wishes and defend their entitlements without so much as recognizing that an actual problem for the financing of Social Security exists. Such shortsightedness is appalling, especially for those of us who will bear that burden. An overhaul of Social Security is necessary and, surprisingly enough, several European countries are setting the example. They have introduced a two- or three- pillar pension system differentiating between the kinds of entitlements for people after their retirement. Typically the first pillar is a set amount handed out to every person above a certain age, independent of any contribution, enough to provide for subsistence. The second pillar is based on the accrued contributions of the retired person and is either somewhat proportional to them or is actually taken from the pooled contributions (defined contribution system - as is the case in Chile). The first two pillars are either state-administered or very heavily regulated. A third pillar, optional and complementary to the first and second, is operated by the market and private insurance companies and, in most cases, the insurance premiums are tax-deductible. Moreover, 

This trifurcation leads to a diversification of the dangers for the pensioners and clarifies the state's role - it provides a guaranteed minimum wage after a certain age, guarantees that the contributions of the individual pay off and provides a motive for individuals to complement their public pension with a private one. Failing to reform the monolithic Social Security system by pandering to the seniors (who allegedly have greater voting power) will surely lead to its collapse.