How About A Real Social ‘Contract’ We Can All Agree On?

by Frank Hill, Telemachus

For some reason, 2010 was the year for learning more about contracts than we ever wanted to know, both written and implied.

We are not lawyers and we don’t play one on a courtroom drama. But we sure felt like lawyers this past year and don’t plan on ever doing so again.

Long-time readers of Telemachus will know that we think the current Social Security system is due for a massive modernization and update. None of us are driving around in 1935 model-year cars (unless you are an antique car buff), so why should we have a national retirement plan based on the demands and financial pressures of the Great Depression era?

We agree that some sort of system needs to stay in place to help the people who truly are in poverty and can’t take care of themselves for one reason or another. But do we honestly need to keep supporting a universal system for ‘retirement’ purposes that sends $3500/month checks to the likes of super-billionaires Warren Buffett, Bill Gates or Donald Trump when they retire?

That is categorically ‘nuts’ in our humble opinion. They can take care of themselves and a few of the smaller populations of states such as Rhode Island or even Alaska in retirement.

We think we should not include the super-billionaires in ‘universal coverage’ for any ‘entitlement’ program and have said so many times before. Reform the system from the ‘bottom-up’ meaning ‘create a system that meets the current needs of the poor elderly first and foremost using current tax revenues and then release the wealthy and super-wealthy to fend for themselves.’

And then do the following:

‘Allow a ‘real’ social ‘contract’ to be signed by every American citizen at age 18 when they become eligible to vote as to whether they want to be in the Social Security system going forward or contribute to their own retirement plan out of those same funds.’

We have had a couple of go-rounds with some very smart people who insisted that there is some sort of ‘social contract’ embedded in stone tablets brought down from Mount Olympus in America circa 1935.

Here’s our question to you: ‘Have you ever signed this mythical ‘Social Contract’? And if not, why not?’

After all, no Congress can bind the hands of any future Congress or living generation in terms of laws or federal programs. Why is it that Social Security is held separate from this doctrine while every other part of the federal government is changed on a regular basis?

We think everyone would be far better off if they had the choice to voluntarily join Social Security at the same age they become eligible to vote, which has a nice sort of symmetry about it all.

Sign the contract and then there would be no question about what your contributions will be to the SS system and what your benefits will be when you retire.

‘Hey! Wait a minute! Isn’t that just ‘privatization’ of SS just like W proposed and got crushed on?’

Not really. This would be a full and open transaction conducted between the US government and every single legal citizen of this nation. And signed with a legal signature in acceptance of the terms from both sides.

That is what a real contract looks like. Not a fake ‘social contract’ that seeks to make everyone feel guilty if they don’t follow it lock, stock and barrel. Like we have collectively done for the past 75 years.

There are questions and concerns about the ‘transition costs’ of such an improvement which we will deal with later. The main thing is to start the debate for going to a real retirement system based on investment and returns. Allowing everyone the chance to make their choice at age 18 by signing or not signing the contract is the place to start.

After all, you can go to war and vote at age 18…why not make this important retirement funding decision as well at the same time?

(Even though you can’t buy a beer legally….which is another weighty issue to ponder)

Related discussion at Memeorandum.

(Editor's Note: Frank Hill's resumé includes working as chief of staff for Senator Elizabeth Dole and Congressman Alex McMillan, serving on the House Budget Committee and serving on the Commission on Entitlement and Tax Reform. He takes on politics from a fiercely independent perspective at the blog Telemachus).


  1. Traditionally, the social contract is something that a person is bound to at birth. In practice, this has the effect of enslaving people as they are bound to something they made no choice in, no matter what the perceived benefits are. The ability to opt out of any "contract" or obligation is a very libertarian idea and one I subscribe to. I like the idea that gives an individual choice as an adult how their money is to be invested, but furthermore, a choice should be allowed to opt out completely.

    As far as the megawealthy, scum like Buffet have been more than willing to suggest that it's ok for the government to take money from individuals because the government needs it. I find it funny that he's such a socialist and capitalist. How about gangster?

  2. Personally, I'd rather see the age for voting, military service, etc. RAISED to 21 to match the drinking age, since there's plenty of credible medical research indicating that some very important parts of the brain aren't fully developed until that age, including judgment. I'd even prefer that driving age be raised for the same reason. Why are we giving so much responsibility to people who aren't yet neurologically developed enough to handle it?

  3. I'd rather lower the drinking age to 18. If you can vote and die for your country, you certainly should be able to drink and smoke. Medical research, at times, follows political and financial dictums. Ask yourself, who pays for the studies? What were they used for?

    18 for all practical purposes is the age of an adult. To change it to continue the puerilization of our society.

  4. People do a lot of dumb things all the way up to age 100 in some cases....

    we can't ever legislate greed or sin out of existence...the only way is to hope for some sort of self-governing principles of decency and decorum based on religious precepts or at least some enlightened worldview of non-believers.

    The main point I am getting at here is the choice issue, period, when it comes to Social Security or Medicare or any other entitlement. Make it a solid contract and treat it as such at age 18 or 21 or 30 but for goodness sakes, just allow people to make their own decisions on retirement just like they do on most other aspects in their lives.

    Chile went to such a program and the Chileans are getting a far higher yield from their national retirement investments than anyone will ever get out of Social Security....hands down across all income levels and strata.

  5. Was it Corpus Christi or Galveston Texas that opted out of SS and gets 4x the SS return? After they opted out, congress closed the loophole.

    And Frank, you and I are in agreement.


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