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February 23, 2011


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Richard Knight

"Government should provide a safety net at some level for societies neediest citizens." This philosophy appears just, sensible and even noble. Why shouldn't we help those who are unable to help themselves? There is unquestionably a percentage of the population who, through no fault of their own, cannot sustain employment or fend for themselves.

But where do we draw the line? What is the measuring stick? Who makes the decision in the field to approve or not approve an individual or family?

I know guidelines are determined and field workers are trained and bureaucracies are thus established. However, sooner or later everyone finds out the rules of the game and the race is on to exploit the loopholes. There are too few monitors and the opportunites for fraud are too great.

Even implementing 'Means Testing', which I am not against per se, does not end the fraud. Those with the means will always be able to find a loophole. They can afford to engage attorneys and accountants who will ensure they stay within the 'Means Testing' parameteres, and yet preserve their own coffers.

In a 2004 Issue Brief on the Subject of Means Testing, The American Academy of Actuaries (http://www.actuary.org/pdf/socialsecurity/means_0104.pdf) asked the following:

Would the profound change in philosophy that 'Means Testing' represents weaken public support for the program?

How would such a change alter the balance between individual equity and social adequacy?
Would other factors reduce the expected financial gains from means testing?
How would means testing be administered?
Are there other ways for achieving a similar degree of savings without changing the current program structure?

While means testing could achieve significant reductions in Social Security expenditures, it would represent a change in the underlying principles of the program. Before giving serious thought to means testing of Social Security benefits, Congress should consider the following questions:

Should the Social Security program be modified making it a more traditional government welfare program? Could Social Security even survive such a fundamental change in its underlying philosophy?
What would be the true savings (if any!) to the Social Security program if some form of means testing were adopted? What would direct savings from lower benefit payments be largeley eaten up by indirect costs, such as lower productivity, legal or illegal avoidance of benefit reductions, and highere administrative costs?
Are there alternatives that could have similar results to means testing while remaining within the current structure?

Personally, I believe the issue of entitlements is an even deeper problem. Human beings are essentially self-centered creatures (e.g. your millionaire refusing to use his own funds for his knee replacement). Individualism is rampant and entitlement is deeply ingrained. Everyone will take what they can get.

At the end of the day, it is a question of morality. If we are not governed with a morality that comes from within to behave in a responsible, other-oriented manner, no amount of outward legislation will change our behoviour. I'm afraid it will only re-dirrect the flow of selfish behaviour.

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