Rewriting Aesop

The government knows best and is looking out for all oldsters (because people can't be depended on to take care of themselves), says the PBS "expert" to a chap who frets that his taking money he doesn't need will end up bankrupting the country:

If we were all identical, all altruistic toward each other, but all aware of each other's altruism, we'd all have an incentive to save too little for old age. In other words, we'd all look for handouts from each other. Or worse, those endowed with more altruism would regularly be hit up by those with less. 

Forcing everyone to save for their retirement, then, as Social Security does, overcomes the so-called "free rider" problem. And this is why Social Security was set up for middle and high earners as well as for low earners. Moreover, not only does Social Security force everyone to save, but it is designed to give the lowest earners -- who will need the most help in old age -- a better deal. This is another implication of altruism. We care more for those who are most in need.  

Also, the system doesn't let people take any risks with their enforced savings. It doles out their benefits to them on a month-by-month basis. 

Finally, the government is using its ability, via the tax system, to observe virtually all of our earnings and force us to save every dollar up to a maximum. This way we can't claim to each other in old age, "I saved at a high rate, but I'm poor because I earned very little," when, in fact, we earned a lot.  

The closer you look at Social Security, the more you see that it's been structured to avoid the Samaritan's Dilemma -- to keep us from free-riding on each other.

Funny, I thought it's been structured to keep us dependent on the government. But, hey, I'm no PBS financial know-it-all who, alas, appears to have taken the wrong moral from a famous fable:

Look, Paul, if you want to forgo the money Social Security entitles you to, go right ahead. You need never take any Social Security benefits at all. But they are yours, and for good reason. This is an economy-wide solution to an otherwise inevitable problem: the incentive to be the grasshopper instead of the ant, and then appeal to our fellow human beings to bail us out come winter. Or to meet the grasshopper's fate, and starve.

So you mean to say that the moral of the tale is: "Don't worry about whether you're an ant or a 'hopper because at the end of the day the government's got your back?"

Good to know--and an excellent illustration of why the U.S. government is going broke.