I think the crisis in New Orleans should be the final death blow to the president's plan to privatize Social Security. If anything, it has underscored the need for entitlement programs such as Medicaid, Medicare and the type of protection that Social Security provides.
I've heard stories of families running out of money after spending three days in a fifty-dollar-a-night hotel. Three days! Can you imagine spending $150 and having it wipe out your savings? One woman, speaking on the BBC, said that after being unemployed for three years - she had worked for the state of Louisiana for twenty years and then lost her job - she let her insurance go; she is now convinced that she will have nothing to return to and no way to replace what she has lost. Some might say that discontinuing one's insurance is a stupid choice, but I wonder how many people would still keep sending checks to Allstate if they couldn't also pay for rent and food.
Social Security is an insurance program, and Katrina should be exhibit A in proving its importance. It protects people against the unknowns of retirement and what could be more unknown than a natural disaster? Having a personal savings account would do little to help these people now. Even if such accounts existed, I doubt the family that couldn't afford $150 for a hotel during a major flood would have much in the way of retirement savings. Many of the victims would probably have to dip into at least part of it to pay for extended hotel stays, rebuilding homes, replacing vital possessions and other costs associated with a disrupted life.
Katrina might also force politicians to rethink the president's tax breaks. The elimination of the estate tax, something Congress was to consider upon resuming its session this month, could off the table at least for now. If a war in a distant land could not convince our leaders to stop giving more money to the wealthy, then perhaps the billions of dollars it will take to secure, clean up and rebuild just one American city might. It's hard to argue that the wealthy are paying too much money to the goverment when the poor are stuck with gas costing more than four dollars a gallon. (Although if anyone can argue why rich people need still more tax breaks, it's the Bush clan.)
Whether you agree with government entitlement programs or not, all of the people who have been left homeless and jobless by the flooding will be receiving public assistance in the form of money from FEMA and other federal agencies. Taxpayers will be taking care of these people for a long time, as well we should. People have lost their pasts; the entire history of some families have been wiped out in flooded and collapsed homes. Wouldn't everyone be able to breathe a little eaiser if they knew that their futures were more secure?
Posted by Doug at September 2, 2005 09:42 AM