Milton Friedman on Social Security

Libertarian Economist


Universal program requires backing of society as a whole

When Social Security was created in the 1930s, politicians in Washington understood that if Social Security was anything but a universal entitlement program that included everyone, it would be seen as a welfare program. As Wilbur Cohen, a former chief administrator of the Social Security Administration, famously said in a 1973 debate with Milton Friedman, "A program for poor people will be a poor program."

For 80 years, politicians have defended this idea fiercely and turned Social Security reform into a third rail. Even Milton Friedman acknowledged the power of this argument in an interview 25 years after his debate with Cohen: "Now, if you stop and think about it, you ask yourself: 'Isn't that true? You need to have a universal program to have the backing of society as a whole, in order that it can really be a part of the structure of society.'"

Source: The Debt Bomb, by Sen. Tom Coburn, p.207 , Apr 17, 2012

Compulsory retirement programs infringe personal freedom

The citizen of the US who is compelled by law to devote something like 10% of his income to the purchase of a particular kind of retirement contract, administered by the government, is being deprived of a corresponding part of his personal freedom. How strongly this deprivation may be felt and its closeness to the derivation of religious freedom, which all would regard as "civil" or "political" rather than "economic", were dramatized by an episode involving a group of farmers of the Amish sect. On grounds of principle, this group regarded compulsory federal old age programs as an infringement of their personal individual freedom and refused to pay taxes or accept benefits. As a result, some of their livestock were sold by auction in order to satisfy claims for social security levies. True, the number of citizens who regard compulsory old age insurance as a deprivation of freedom may be few, but the believer in freedom has never counted noses.
Source: Capitalism and Freedom, by Milton Friedman, p. 8-9 , Nov 15, 1962

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