Thursday, March 31, 2005

What Would Jefferson Say?

In a letter written in September of 1789 Thomas Jefferson took up an interesting question with James Madison. "The question Whether one generation of men has a right to bind another, seems never to have been started either on this or our side of the water." The purpose of Jefferson's letter was to explain his answer and then offer some thoughts on the implications.

I find Jefferson's answer to the question interesting with respect to the current debate surrounding social security reform. The Old Age Insurance part of Social Security looks very much to be a subject of Jefferson's question. Old Age Insurance is a government program by which money to pay for the monthly benefit checks paid to retired workers is taken from current workers via the FICA tax. Since some of the workers will be under 30 years of age, while some of the retired workers will be over 70 years of age the Old Age Insurance program certainly involves at least an older and a younger generation, and maybe three generations. It would also seem to be the case that this program was written into law well before the younger generation of workers was able to vote. With our Old Age Insurance program we do seem to have an older generation binding a younger generation.

So what did Jefferson say in answer to his question? He said that a generation did not have the right to bind another generation. He went further in his discussion by making some calculations, and concluded that a term of 19 years was the relevant time period. The really interesting aspect of his letter was the implications he saw for the constitution and for our laws:

". . . it may be proved that no society can make a perpetual constitution, or even a perpetual law. . . . .Every constitution, then, and every law, naturally expires at the end of 19. years. If it be enforced longer, it is an act of force and not of right."

He thought it was not sufficient to give the younger generation the power to repeal. He argued for laws and a constitution that expired after a fixed duration. If he held to that view today it would seem he would have to see the Old Age Insurance program we are considering reforming to be "an act of force."

Perhaps times change, but it does seem to offer an interesting perspective for considering the politics of social security reform today. Is there a way to structure the Old Age Insurance part of Social Security so that it is less an "act of force" across generations? One thought might be to make a good, honest effort to let the younger generation decide for themselves whether to be bound by the statutes of the older generation. But, that thought simply gets no quarter in public discussion today. Government made promises to the retired workers of today, and everyone in politics seems to accept that government will pay off on those promises. At least the older generation of Americans could let the younger generation decide for themselves how their Old Age Insurance program should be structured. Today's political discussion has been clear that the older generation would be held harmless by any reform. The proposed private accounts are of course not relevant to the older generation. Private accounts should be considered a proposal for the structure of the Old Age Insurance program of the youngest generations. Perhaps the older generation could learn from Jefferson's question and answer and choose to step aside in this social security debate regarding private accounts and let the younger generation decide for themselves.

6 comments:

Anonymous said...

If Thomas Jefferson were around today, he would be turning 262 on April 13th and would scream to have his feeding tube removed.

monterey63 said...

Anonymous, your comment made me laugh out loud. Even though it is truly funny, I think you make an excellent point. To everyone I plead, get a living will.

monterey63 said...

Ok, now for the social security issue. I would like to see social security (s.s.) funds distributed based on need. So many seniors receive the pittance that is their s.s. check and are faced with hard choices like prescriptions vs. food or heat vs. rent. Other seniors forget to cash the check for weeks, they have no need.

My plan would cap the maximum benefit based on the figures already in place and would limit the pay out of those benefits to only those that can prove a need. Many would argue that working adults have been paying in to the program with the expectation that they would receive a return. I agree and think that those who have participated up until now should be paid as they were promised. But we could draw a line and make the change so that Americans are ready for it. For instance, anyone born after 1990 should not expect this assistance unless they find themselves in financial need. By the time that generation reaches retirement age we hope that they will have prepared for the event. If not, there would be s.s. available.

I believe that this would lower the amount of money that the program would need in the coffers and therefore lower the amount that each of us would need to contribute.Yes, we would still have to contribute. Why not? We pay taxes now that fund programs for the less fortunate. We would just have to start calling it what it is, a tax rather than a contribution.

As far as the president’s current debate, do not believe for a second that George Bush is promoting his s.s. plan for anything less than political and personal gain. He has proven again and again that he doesn’t have it in his heart to give a damn about anything except those ravenous goals.

Larry Eubanks said...

monterey63 has suggested a change in social security that may or may not be relevant. The original post explores the view of a different American President, Thomas Jefferson.

The suggestions of monterey63 seem to me to only become relevant if we first disagree with Jefferson. And, it is Jefferson's assertion that one generation does not have the right to bind a later generation that I'm interested in.

I would like to hear from monterey63, or from anyone else, what gave our parents and grandparents the right to pass a statute years ago binding us to pay them a monthly income now that they are retired?

Or, put it this way, what gives you and I the right today to pass a statute that binds our children and grandchildren to pay me $1500/month (the amount Social Security is actually promising me)when I retire?

One related question: Do you want your kids and grandkids to be forced to pay your monthly social security check when you retire? I don't.

monterey63 said...

Although I don’t see social security as a question of one generation binding another, if I must take sides on Jefferson’s statement, in this case I disagree. I believe that as human beings we have a moral obligation to come to the aid of those who can’t help themselves. I find it unfortunate that we are forced to put this care in the hands of any local, state or federal entity but that is the reality.

I don’t believe that the social security program is “binding” to a younger generation. We could argue the accounting methods of the plan but ideally we all contribute with the expectation that we are participating towards our own benefits, not funding the checks of the current recipients.

We have the right to make changes to our current legislation at any time. Jefferson’s idea of our constitution and laws expiring every 19 years is preposterous. Can you image the bureaucracy associated with the renewal of all of our nation’s laws every generation? We have the ability to strike ineffective laws and create new ones at any time. Unfortunately, enacting or changing the laws of our society has become an exercise in political prowess rather than a fight for the common good.

To Jefferson’s defense, those were simpler times.

Larry Eubanks said...

monterey63 writes: ". . .I don't see social security as a question of one generation binding another."

I think it is beyond dispute that this is indeed an attribute of Social Security. The money for the monthly benefit checks sent to those now retired is the result of government's FICA payroll tax which is paid by current workers. Note also that the Social Security system was created by Congress many years ago. When people enter the labor force and earn their first checks, they aren't asked if they want to participate or not. There is no annual vote on the social security system. People voted for Congressional representatives who voted to create the Social Security system long before even I got a chance to vote.

While I'm sure we have the "right" to make changes, perhaps it would be worth considering the current politics of Social Security reform. For example, is AARP arguing that the younger generation of workers should be allowed to pick their own government version of Social Security? Just the opposite it seems to me. AARP wants to continue Social Security on current terms, and these current terms were picked by generations before me. The political discussion has assumed the current retired and soon to retire will be held harmless with respect to any social security reform. I wonder why it is that AARP doesn't simply step aside on the grounds that any reform today will indeed be relevant to the younger generation when they retire?

I'm still interested in knowing if parents in the work force today really want to have their kids and grandkids paying for their retirement.