More importantly, if a worker participating in Social Security dies before retirement, he loses his contribution (though part of that money might go to surviving children, if any, or a spouse who didn’t work and therefore didn’t establish his or her own benefits). But a worker in the Alternate Plan owns his account, so the entire account belongs to the estate. There is also, among other benefits, a disability benefit that pays immediately upon injury, rather than waiting six months, plus other restrictions, as under Social Security.
And those who retire under the Galveston model do much better than Social Security. For example:……..”
“And those who retire under the Galveston model do much better than Social Security. For example:……..””
There is no question that with competent management, fiscally sound retirement models can be created. All Americans should have access to these (not just local government employees).
However, As candidate Perry points out, Social Security isn’t one of the ways to accomplish this, unless one were to balance money coming in with money going out, and add sound practices managing fund balances. As you know, none of this was part of Social Security - it is, for all intents and purposes merely an inter-generational transfer payment funded out of current year tax receipts.
Any new system must be free of any obligations not incurred by the new system, and folks should be able to opt-out of Social Security.
The problem is that we don’t have the current tax receipts to pay everyone everything they want, and to provide everything else everyone wants. If we let people opt out of SS in favor of an actual, competently managed retirement program, then we have less tax revenue to redistribute to present SS recipients, and every other program that government funds.
That is why Perry, and every other politician is lying about what they will do with SS. They must have the tax revenue money, or they must cut the benefits and programs, or they must borrow the difference. We are at the point where borrowing is not feasible for much longer.
So what will Perry and other politicians do? They will most certainly not cut benefits. Borrowing will eventually stop, or become prohibitively expensive, but they’ll do as much of that as they can until they cannot any longer, and so they must....they must collect all the revenue that they can.
No politician, including Perry can change this reality. They must collect revenue, borrow, or reduce spending. There is no other way to get to a sound system. There is no way any politician will get elected on this platform.
So what will they do? They will lie. Every single one of them. When they fail to bring things into a financially sustainable mode, they’ll blame someone else.
The revenue side will collapse, the spending side will grow, and the borrowing will gradually become impossible.
When it all breaks, we’ll then decide who gets what out of whatever revenue pie is left.