Cato Institute co-founder Ed Crane has always said that freedom is the answer to any question about economic growth. If people are free they’ll have all the prosperity they could ever want.
Crane’s view of the world is something President Trump should embrace. In the next four years all manner of economists and budget experts will vie for an audience with Trump to talk about Social Security and the alleged “crisis” of insolvency that supposedly looms. These small thinkers will be wasting Trump’s time as they suggest fixes to maintain an ineffective, wealth-sapping creation of the federal government. He should think about freedom instead.
Rather than attempting to fix Social Security, Trump’s aim should be to create a path out of the government’s retirement system. Wealth is an effect of savings matched with talent, so Trump should instruct members of Congress to write legislation that will free Americans to cease paying into the federal government’s retirement plan, and instead direct their wealth into the stocks and bonds of the world’s greatest corporations. It’s that simple, plus it’s Trumpian.
Seriously, who better than Trump to bat away the hysterical responses that will inevitably come from critics of such a plan? They’ll say Trump is blithely and arrogantly exposing the future retirement of the Americans who would opt out of the federal government’s retirement plan to the vagaries of a U.S. stock market populated by his billionaire and trillionaire friends, to which Trump could and should respond: precisely.
The United States is filled with the greatest, most entrepreneurial, most action-oriented individuals on earth, and they’ve historically floated shares in their commercial concepts to the public. In freeing Americans from a very high retirement tax (6.2 percent charged to workers, another 6.2 percent charged to employers) that automatically funds the Social Security payments of existing retirees along with general federal expenditures, the federal government is depriving Americans of the chance to acquire a growing and compounding share of the world’s greatest corporations operated by the world’s greatest commercial talents. In which case, true blithe is taxing away such substantial portions of individual American wealth for retirement, only to deprive the creators of that same wealth of the equity exposure that would fund a much greater retirement.
From there, stop and consider just what the critics of retirement freedom are saying: that savers will be better off if forced into a government-run retirement program than they will be if they cast their lot with American economic ingenuity. Talk about arrogance, and worse, arrogance that runs counter to basic common sense.
As we see every day, Americans go to great lengths to avoid dealing with wasteful and inefficient government on all levels, yet on the matter of retirement they not only deal with government, but they’re required to. Trump will hopefully recognize the obvious problem with such a set-up, but also the opportunity that comes with freeing people to tie their retirement to brilliant creators of wealth, as opposed to a federal government that consumes it.
Trump should pound on this basic theme of freedom and choice daily. What makes a country great is free people, and Trump has a chance to free every American from a command-and-control program that routinely destroys hard-earned wealth while depriving its faux beneficiaries of the chance to actually build growing, heritable wealth for themselves, and their family members.