My last post was totally influenced by my outrage of the statements from the Chairman of the Federal Reserve regarding Social Security and Medicare and I failed to follow through with an alternative recommendation or solution. Business 101 tells us if you declare a problem, you should offer a solution.
With that in mind, let's get one thing clear. The government has no business tinkering with things in the social arena. All you have to do to understand the previous statement is to look at the Social Security debacle. And if you can't see that clearly, then ask yourself why all members of the United States Congress don't pay into Social Security. In fact, they have their own plan that, upon retirement, pays them 100% of their salaries with complete health benefits after they retire. You, the tax payer pick up the tab. Isn't that nice?
Meanwhile, it is those very same congressmen that have robbed the funds from the Social Security program to pay for other programs and replaced them with I.O.U.s And now we're being told that the program will have to be "recalibrated".
All ranting aside, there can be no way any thinking person can believe that the Social Security program should ever have existed. It's a classical example of socialism gone wrong. It has sucked earnings from hard working Americans through their entire working lifetime and given it to others. Now when those very same Americans are coming to the time when they will need to rely on those same benefits, they will be told "Sorry, the system has been "recalibrated" and you can't collect for another 5, 10, or 20 years." Where is the outrage?!
The Bush plan to privatize Social Security is a non-starter. Redirecting contributions into the stock market will only enrich the brokerage firms of Wall Street and distort the markets in the process. More importantly, it fails to address the issue that the government has no right to take these funds from Americans in the first place. Why won't they give Americans the freedom to invest for their own future?
I see only one possible solution to the problem. First, the government must realize that they aren't in the "social" business. (Extremely unlikely given the almighty vote.) Next, they need to commit to grandfather the program out of existence. For example, if you are 60 years old, you get 90% of the benefits. If your 55 years old you get 75% of the benefits. And if you are 16 and are working your first job you pay nothing because you'll get nothing..
The problem is that, as I understand it, the system is truly broke in that it has only I.O.U.s from the government so the above plan simply can't be implemented. I'd like to offer a solution but, in fact, there is none.
In closing, I maintain you have been lied to by your government. Your only recourse is to:
1. Forget about the government taking care of you. It won't, it can't, and in my opinion, it shouldn't even try.
2. Get out of debt as soon as possible. Debt is slavery and the sooner you are out of it the sooner you are free.
3. Hedge against the government's proclivity to devalue the dollar through inflation by acquiring assets that have demonstrated an ability to maintain true value independently of the dollar.
Good luck.