Leftists fail to understand the difference between socialism and pensions

private pensions

Private pensions are superior to both government and corporate pensions

Why do liberals think Social Security and pensions are socialism?  For the same reason they think being a business owner taking a higher salary than employees is greed.  Liberals do not understand the entire system of how money works.  They see people getting money and they think redistribution of money works and anyone who gets more is greedy.

This is a very basic lesson in understanding these.  It consists of salaries, pension contributions, taxes, and eligibility.  The saying, ‘Can’t see the forest for the trees,’ describes liberal mentality perfectly for failing to understand the big picture and all its parts.

Pensions are retirement accounts to which people contribute a portion of their salary to receive back after they retire.  These are generally interest bearing accounts and there are many different types, but for this example there are only two; personal and government accounts.  Social Security and some federal, state, and local agencies have government accounts administered by elected officials and their agents.  Private pensions of corporations, some groups like my own; the Dallas Police and Fire Pension System, and personal 401ks are privately funded from the salaries of individuals and either administered by the individual or a selected group.

Government pensions are not voluntary, but mandatory and paid by taxes, namely the F.I.C.A. tax.  These pensions are subject to the government and dependent on tax revenue, so if revenues go down during times of recession, then those in control of the government can choose to pay out less at a time when people need the money more.  Even Social Security is not secure as proven in 1968 when the Democrat Congress under Lyndon Johnson raided the surplus to pay for the expenses of the Vietnam War.

Private pensions are administered by its owners.  Those who pay in decide how the money will be paid out.  The greatest difference here can be taken by the example of the Dallas Police and Fire Pension System.  Because it is privately funded the City of Dallas has been trying to change Texas State Law so that they can take control of the fund and all of its assets.  They attempt this so they can decide how much to pay out to members and how much of it they can use for themselves just as Democrats did with Social Security and like Obama is trying to do with 401ks.

Both systems have one thing in common; both are funded out of the salaries of those who would draw from it after they retire.  The difference is that the private pension will only pay out to those who paid in, while the government has chosen to pay out to others who have not paid in like elderly illegal aliens, and young people who file disability (even if they are not disabled, just cannot find a job).  While neither of these is socialism, government distribution of Social Security to those who have not paid in has elements of it, which leaves those who actually paid to fund it with less.

One last bit of math to explain how a city pension system works:

Police and firemen are not taking money from the citizens.  They are being paid to provide a service to all the citizens.  Their salary constitutes both their pay and their pension.  The employee is asked to pay 8% of his salary into the pension system and the city agrees to contribute 12% that is not extra money taken from the citizens.

The salary may be broken down into parts, but it is all included as salary along with whatever benefits are offered.  People fail to understand that their employers are paying them more than their salary by paying for their medical benefits.  This is not extra, it’s a part of their total salary.  If the employer cuts out those benefits so the employee must pay for their own health insurance, or if the city reduces its pension contribution and increases the employee’s, that is a pay cut!

Being a private pension, the Dallas pension system does not rely on the city employing more police and firemen to pay the pensions of retirees.  Even if there were none, that pension would still be there because it is a fund that accumulates interest.  And if it ever did disappear entirely then that is when the welfare system is supposed to kick in.  Welfare is meant to provide subsistence for those unable to work, not provide luxury for those unwilling to work.

So don’t believe that those who collect pensions have done nothing to deserve them.  Pensions are paid into for years and collected according to how much the contributor paid into it.  Unlike the government, private pensions are not a burden on taxpayers.  They are a benefit because their money adds to the taxpayer base.  You should not mistake the difference between taxes being used for America’s benefit with taxes being used for the benefit of a few American’s, or the difference between benefits returned to those who paid into the system and entitlements being given to those who contributed nothing.

As a final note, there is also the corruption in both government and corporations.  The former is capable to taking that pension away if they fire an employee at any time up until retirement.  They can also levy as heavy tax burden on people as they desire to pay exorbitant pensions.

Corporations, by comparison, can lay off employees early to deny them a pension or go bankrupt and steal the pension of vested employees like Enron did.  All in all it is always best if the employee controls their own pension so neither the government nor their employer can abuse others or take away what they have earned.  Pensions are an investment toward retirement, not money for corrupt government or corporate magnates to use as they wish.  This is why free market individual capitalism is far superior to dictatorial socialism.

Socialism, capitalism, and the American Way

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About dustyk103

This site is my opinion only and is unpaid. I am a retired Paramedic/Firefighter with 25 years of service in the City of Dallas Fire Dept. I have a B.A. degree in Journalism, and A.A. degrees in Military Science and History. I have spent my life studying military history, world history, American history, science, current events, and politics making me a qualified PhD, Senior Fellow of the Limbaugh Institute, and tenured Professor for Advanced Conservative Studies. 😄 It is my hope that readers can gain some knowledge and wisdom from my articles.
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5 Responses to Leftists fail to understand the difference between socialism and pensions

  1. Arthur W. DiMatteo says:

    Social security is a pretty good example of socialism in practice, actually. The US post office is another example. They are both government monopolies administered by the state in the public’s name. Hard to say that isn’t socialist. Like almost all modern economies, the USA uses a mix of socialism and capitalism. In a pure capitalist society (something like Ayn Rand’s vision, for instance) there would be no government post office, only private delivery companies; there would be no Social Security, only privately-run retirement investment firms; and pensions for government employees would not be paid for by the taxpayer because even fire departments and police departments would be privatized. City and state fire departments as they exist today are socialist institutions. History actually does provide us with an example of an age where fire companies instead charged for their services and made a profit: Crassus owned nearly half of Rome.

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    • dustyk103 says:

      Crassus and Caesar are perfect examples of why unfettered capitalism becomes corrupt. Crassus used his private slave fire brigade to gain ownership of half of Rome, and Caesar used his virtually private army to over throw the government. This is why the Founders made the military – armed forces, law enforcement, and fire protection – all the responsibility of government both federal and local.

      Republicans like Teddy Roosevelt protected labor and broke monopolies. In this way everyone is assured of equal protection. But that doesn’t make it socialism. It just makes it sensible to stop corruption.

      Social Security is not an example of socialism. People who put in more draw out more, whereas in socialism everyone puts in according to what they earn but all draw out according to what they need. That would mean millionaires who put in a hundred thousand dollars draw out nothing because they have enough to spend their own thousand dollars a month, while someone who puts in nothing can draw out a thousand dollars a month.

      The Post Office is a great example of a government monopoly that became such a burden on the taxpayer that private companies were able to step in and perform better. Government administered health insurance – single payer – would lead to the same excess, abuse, and corruption, which is why a government monopoly is every bit as bad as a corporate monopoly.

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  2. Arthur W. DiMatteo says:

    “People who put in more draw out more, whereas in socialism everyone puts in according to what they earn but all draw out according to what they need.”

    Nope, that would be communism instead of socialism. Lots of people confuse the two. In socialism, everyone puts in according to their ability and receives back from the government approximately what they put in. In communism, the state decides what everyone needs and distributes everything according to that criteria. You use the famous (or infamous?) Marx quote on your other essay on this topic. Remember, according to Marx, society is supposed to progress *from* socialism (“each according to his ability”) and *to* communism (“each according to his needs”).

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    • dustyk103 says:

      I see where you’re coming from. Socialism is developed, as I said in the article, from tribal mentality wherein those who contribute the most to the government receive the most from the government. That’s why Marx said socialism “progresses” to communism because it results in those who don’t need receiving more than those who do.

      This still requires uncorrupted leadership, which is an impossibility without some kind of checks and balances. What this would result in is something like feudal society where the working class becomes slaves to the ruling class. That is why capitalism structured by legal protections works best.

      There is no incentive to do more without the ability to rise. And leadership requiring graft over leadership receiving taxes are at odds with economic growth. That is where the Left falls when compared with the Right.

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  3. test56538 says:

    Most don’t want to admit it, but everyone is a socialist. There is a scale from 0 to 100 with no country is either close to 0 or 100. If the writer himself is from the USA, then he fails to see that USA falls almost smack in the middle of scale.

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