William Shipman

What is the role of the individual in a free society? What is the role of the government in a free society? Under our system of government, with specific reference to the Constitution, the federal government has limited powers beyond which they reside with the states and the individual. A rational system would have the government provide goods and services that it can deliver more efficiently than the private sector and leave all other provisions to the private sector. Unfortunately, from this perspective our system is irrational, at least in some cases. The federal government provides retirement income in the form of Social Security. The private sector does as well through defined benefit and defined contribution plans. Relative to DB and DC plans, Social Security is terribly inefficient. That is to say benefits are very low relative to the payroll taxes that finance them. Social Security is a bad deal.

And that is why it is mandatory. If it were voluntary, most people would leave it for the more efficient defined contribution model.

The Social Security debate is emblematic of the role of government in our lives. With irrefutable evidence that Social Security is a bad deal, we are not free to leave it. We are not free to spend the equivalent of our payroll taxes on a more efficient structure. We like to think of ourselves as free, but in this particular case we are not. And this is not a trivial case: 80 percent of workers pay more in payroll taxes than they do in income taxes and for which they receive very little. Again, what is the role of the individual, of the government, in a free society?

Shipman will share with you his experiences with congress, his testimonies to congressional committees and his plan to allow all workers to remain with Social Security or leave it.