Social Security in its Broadest Sense

In the past couple of days we have examined how both health and economic security were severely compromised in this country even before Covid-19 came along. We have seen how deeply unprepared we were for a crisis such as this. In most developed nations, if the economy sputters there is a safety net – the sole exception being the United States. Why is this important? 


If in a well-functioning democracy there is a social contract between government and the people in which, in return for paying taxes and obeying reasonable laws, government provides a framework of security for both society and individuals, then that contract implies that there will be security even for those who fall on hard times. 


Even if you don’t buy the moral argument here, then listen to the economic one. Take, for example, all those cities and towns in America which have been incredibly hard hit by the changing economy (prior to coronavirus). Towns whose steel mills and automotive plants have been closed. Towns where the tax base has been eviscerated, schools closed, fire departments and police decimated, and where Main Street is a strip of boarded up businesses. As populations have declined, those left behind saw their incomes dry up, their children lacking in educational and recreational opportunities, hospitals close and nobody coming to help. Despair set in and many (not all, by any means) turned to drugs to mask their desperation – opioids and meth chief among them. 


Now think of the cost of all that. The opioid crisis alone has cost us $1 trillion since 2001 and is forecast to add another $500 billion in the next three years alone. Added to which, it has accounted for 43% of the decline in male labor force participation. Surely there was a cheaper way to deal with the decline of middle America? 


There was. 


In supposedly “socialist” countries such as Denmark (which, by the way, is not socialist at all), the state will not only pay to have such workers retrained, it will also pay relocation costs to get people to new jobs and continue their salaries during the whole process. Expensive? Sure! But a damn sight less expensive than cleaning up the mess of a collapsed economy and society. 


Social security is not just your pension in old age. It is about providing a proactive safety net for when things go wrong. In Europe right now, we are not seeing the mass unemployment that we are seeing here. Why? Because the social security safety net kicks in to guarantee workers 80% of their salary and to ensure that they can’t be summarily laid off. Again, it’s cheaper than having to inject $2 trillion via emergency payments to households (and botching that, to boot) and paying unemployment benefits and seeing your tax base dry up. 


Added to which, it’s the right thing to do. People who have been hit the hardest have been faithful tax-payers for the entirety of their working lives. The country owes them security in bad times as well as good. 


It’s called a social contract.



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