Ask yourself one simple question. Why does our government insist on total control of our well being when it comes to the issue of Social Security? Where, in the Constitution of the United States, is it mandated that the Federal Government insure our retirement years? And if, by some stretch of imagination, one could make the claim that it does exist, then our government has failed miserably with regard to their charge.
President Bush speaks of an "ownership society" and at the same time is trying to control and direct that "ownership". It is a fact that conflicting messages from parents can make a child schizophrenic. The mixed message here is "I advocate an 'ownership society'. One where Americans take 'ownership' of their Social Security accounts by privatizing them, but we will control those private accounts." Ok. Just give me another shot of thorazine and I'll be fine...honest.
Presently, employees pay 6.5% of their wages into Social Security up to a cap of $90,000. The standard operating procedure of our government when faced with a failed system like Social Security is to raise the cap so they collect more dollars, raise the age at which individuals are able to collect their benefits so they pay out fewer dollars, and decrease the amount of benefits the individual eventually receives...if they live long enough. That's not my idea of a "fix".
The fact of the matter is that over the years our government has broken many promises to the American people and Social Security is just one of them. Raising the age at which one is eligible to collect what they have paid into all their lives, raising the cap and paying out a lesser amount in benefits are perhaps the most recent examples.
You can be sure you will be hearing more about these "solutions" as our government attempts to "fix" Social Security".
In addition, the Social Security reform plan anticipates the need to borrow $2 Trillion dollars to keep Social Security solvent. Ask yourself who is actually expected to pay off that "loan"? The interest alone could probably go a long way to keeping the plan solvent but the interest doesn't go into the Social Security system. So where does it go? And who pays it?
And given the government's proclivity to conservative estimates when it comes to spending, the cost is likely to go much higher. The "estimate" to fix Medicare was $400 billon dollars. Now, before prescription one has been written under the new, improved, "fixed" Medicare plan, the cost is now estimated at $700 billion to $1 trillion dollars.
I submit that the best way to fix Social Security is to discontinue payments into the system...immediately.
Those who are 65 get full benefits. Those who are 64 get 98% of the benefits, 63 get 96%, etc. Those who are 16 pay nothing into the system and get nothing from it. They have their entire working lives to provide for their own well being when they retire. Responsibility for one's own well being. Now there's a concept.
How can this work? Simple. Instead of individuals paying 6.5% of there wages into the plan each year they get to allocate their new found savings into their own retirement plans. That's "ownership".
In addition, presently, employee Social Security tax contributions must be matched by their employers. Eliminating those contributions would mean a 6.5% windfall to corporate America that goes right to the bottom line. Businesses will be better able to compete in the global economy, thus, more likely to create more jobs hiring more Americans who will be able to contribute to the economy in the form of increased purchasing power as well as increasing revenues of the government through income taxes. Businesses would also have a new-found ability to raise matching contributions to employee IRAs.
Currently, self employed individuals have to pay 13% into Social Security. That savings would also surely be used to fund their personal retirement plans and perhaps stimulate the economy as well.
Once again we see that when government butts out of private individuals lives, things have a much better chance of working just fine.
For more reading on the subject of Social Security, see here, here, and here.Lastly, my proposal for Social Security just might not be viable. If, as has been alleged, the Social Security fund has been looted by our government and replaced with I.O.U.s in the form of bonds (loans), then there is no money in the system at the present time to pay anyone. You be the judge.
