A comment by Doug Wright on his show this morning got me thinking. Doug talked about how incensed he was by a comment made by someone running against Harry Reid that her father never cashed a social security check because he refused to take a handout. (I’m assuming he was referring to Sharron Angle but I’m too lazy to confirm that because the identity of the person he was quoting has no bearing on my subject.) Doug was incensed because of the characterization of Social Security as a handout considering that “we have all paid into it.”
The thought that struck me was that perhaps Social Security should be charity – as opposed to an expectation. The way the system is currently set up, everybody who pays into Social Security expects to receive checks from Social Security when they retire. That’s not entirely true of my generation, many of whom are highly skeptical that Social Security will still be around when we arrive at retirement age, but it is historically true. How much of our Social Security solvency problem would evaporate if we were to add means testing to the social security calculations such that those receiving payments would receive reduced payments or no payments depending on the amount of wealth they had available (regardless of whether they were tapping into that wealth).