This is really a tax increase. The government will use the money and deposit IOUs into the IRA accounts. Then down the road, they will have to figure how to come up with the money. Let’s get rid of SS and let the people have personal accounts.
“The government will use the money and deposit IOUs into the IRA accounts.”
Exactly — that’s the whole idea, what do you think that US “R-bonds” will be?
They will take the money now, then Obamacare will make sure Seniors don’t live long enough to actually want to use their money.
The reason personal accounts are not sponsored by Democrats is the mere fact they will not control nor have jurisdiction over people’s lives as they do with Social Security.
The same fact holds true to Government workers on all levels (Federal, State and Local). They can collect taxes from the private sector and pay the public sector with ever increasing rates.
This gives the Government leverage over party loyalty and union affiliation as they extort money from the productive to pay for the non-working and the State workers who produce nothing in the way of GDP.
The question comes to necessity, are soldiers, cops, firemen and teachers important? Yes they are, but should we pay for them for life...maybe cops, fire and military as they put their lives on the line...but run-of-the-mill paper pushers in the courthouse or DMV?
I would like all public employees, except cops, prison guards and military, to have 401K’s they contribute to, and based on the FY profit or loss, their employee match is in lockstep with the overall private sector.
Unions killed the auto industry, the airlines and now are killing the government.
Time for reform. Now.
“This is really a tax increase. The government will use the money and deposit IOUs into the IRA accounts. Then down the road, they will have to figure how to come up with the money. Let’s get rid of SS and let the people have personal accounts.”
I agree that this idea is dangerous. The idea of a new government treasury bill is frightening. The inflow of cash will fund even higher spending levels. The treasury bills will be backed by useless government promises, not any wealth creation ability and real assets.
The most dangerous part of the proposal is the idea that the government will provide a return of inflation plus 3 percent. No one can guarantee any return. The private sector can issue bonds but the bonds depend on corporate assets and wealth generation. The government only has taxation power which reduces wealth creation when tax rates become confiscatory.
The annuity idea is just as dangerous. This proposal is an extension of the unsustainable Social Security inflation indexing (CPI-W). Inflation indexing is a large reason that Social Security is not sustainable.
This proposal will provide us with two bankrupt government pension schemes. The second scheme is an attempt to fund the first scheme. The rats claim that you will have property rights on the second scheme. Since a large part of the contributions are not really invested (new Treasury notes), your property rights are not enforceable. Moreover, this scheme will continue to drain private investment funds, the driver of economic growth.