Social Security & Medicare Notes

Galveston - 25 years without Social Security

Brazoria County (Galveston), Texas withdrew from Social Security 25 years ago and replaced it with individual accounts in private investments.

Here is the story as reported by the Christian Science Monitor.

As you read it, remember that the reporter is no expert on the benefits provided by either system, so comparisons are not very good. Here is a quote from the story: "Eric Kingson, a professor of social work and public administration at New York's Syracuse University. "Social Security is built on the premise that we have some responsibility for each other," he says. "If you weren't worried about those basic protections you could use a private system, and the Galveston plan is a good example of how that system would work."

He studied the county's plan and testified on it before the House Committee on Ways and Means in 1999. "What it does is create huge winners and huge losers," he says.

Another study came to a similar conclusion. A federal General Accounting Office report in 1999 found that lower-wage workers would receive more under Social Security than under the Texas county plans, while higher-wage workers and those without children tended to do better under the alternate plans."

The GAO probably did a pretty good job of investigating the differences and comparisons, but the reporter does not provide the assumptions and background that would allow us to understand what was being compared.

But then there is this: ""That's just not true," says Brazoria County Judge John Willy. "In almost every case, county workers make double what they would make with Social Security.""

Remember, in Texas the County judge is the elected Chief Officer of the county (not a judicial officer) and is no expert in anything except getting elected. His comment is based on anecdotal evidence and cannot be trusted. He does not have any idea what he is comparing unless he has done a careful study, and if he had time to do that he should have lost his job. I am reasonably sure he thinks he knows what he is talking about. It is just that it is very unlikely that he does.

Brazoria County must have dropped out of Social Security just before the changes to the law in 1983. State and local governments have not been able to do that since then.

The real key as far as I am concerned is the underlined items above. "Social Security is built on the premise that we have some responsibility for each other,"

Replacing Social Security is another idea based on Republican values in which a person is only worth what they earn or the wealth they control measured in dollars. When those are the social values, then they set up systems which over-reward income and wealth and under-reward the average worker. Please note the utter absence of human values. Everything that matters is dollars.

posted by Richard @ 9:15 PM