Posted on 03/22/2006 12:34:54 PM PST by qam1
Everyone seems to have a plan now to “save” Social Security. While these plans typically include varying degrees of increased taxes, higher retirement ages, reduced benefits and escalating deficits, they each share a common theme. That is, they all preserve a massive government mandated retirement program that has us deep in the red. In fact, at this critical juncture in history, as we watch the last years of Social Security surpluses tick away and await the morass of deficits to come, phasing out Social Security could hold the key to solving our looming financial crisis.
Like many famous pyramid schemes, Social Security began by immediately paying benefits to retired workers who had contributed little into the system. In this fashion, the system bet that future workers would always be able to fund the retirement benefits of their elder peers. However, the ratio of workers to retirees has drastically declined. Whereas the ratio of workers supporting each beneficiary was 16 to 1 in 1950, it is now down to approximately 3 to 1. This has led to an incredible imbalance that threatens our way of life.
If we are going to fix the inherent problems of Social Security, why not consider real reform? My recent Social Security statement noted, “This Statement can help you better plan for your financial future.” It went on to explain all of the benefits that I could expect. However, when I went to the White House’s Web page on Social Security, it noted that, “The government has made promises it cannot afford to pay for with the current pay-as-you-go system.”
Our government does us a disservice when it tells us what to expect in our retirement years, while knowing that the system lacks solvency. As harsh as it may sound, the truth is that the only person we can rely on to provide for us is ourselves. As we saw in the Katrina debacle, big government is not always going to be there to pick us up, dust us off and start us over again. Thus, rather than setting us up with expectations that they will undoubtedly fall short of providing, our government should be candid with us.
Those currently retired and the baby boomers who will begin to retire in mass are expecting us to keep the promise that we have made them. They got in this pyramid scheme when the going was good and want to ride it out. Can you blame them? We can’t simply tell grandma that she’s on her own. No, a promise made should be a promise kept.
We’ve also made promises to the working mothers and fathers in Generation X who expect us to take care of them in their retirement years, and we should keep these promises as well. However, to those who are just coming into the work force, no promises have yet been made. In fact, surveys show that many of these workers already believe that Social Security will not be around when they retire.
By ending the entitlements of Social Security for younger workers entering the work force while maintaining their payroll taxes into the system, we can afford to pay for the promises that have been made. Furthermore, we can phase out an inherently flawed entitlement program and decrease our future reliance on the federal government. If we package this plan with a real initiative to pay down the national debt, while exempting younger workers from this added tax, we can truly work together to strengthen our nation and assure a bright and prosperous future for all.
Give me back that 6% (technically 12% w/employer contribution) of my income that's going to Social (In)Security and let me invest it myself!
Ping list for the discussion of the politics and social (and sometimes nostalgic) aspects that directly effects Generation Reagan / Generation-X (Those born from 1965-1981) including all the spending previous generations (i.e. The Baby Boomers) are doing that Gen-X and Y will end up paying for.
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There is no question that Social Security must be eliminated. The only issue is how to get rid of it in the most painless way possible.
Blast! I fall just short, as I was born in 1982. :)
I sure won't be missing it.
I'd like to imagine a US with a Fair Tax and no SS - but the imagination fails...
Phasing out social security has always been the right idea, but it won't happen until the backs of the next generation or two begin to break under the tax burden. Then I think those taxpayers will force the politicians to begin to phase it out, and it'll end with the Baby Boom generation. That's my prediction, anyway. Check back in 50 years to see if I'm right.
Seems GWB's personal retirement accounts are a good step toward that end. Too bad there's so much FUD muddying the waters on the issue.
You mean, who is going to get screwed the most.
The Republican Party of Big Stupid Government doesn't have the guts to do anything like this. They don't even have the stones to take PBS off the taxpayer teat.
This puts retirement investment in the corporate world, which is 80% of the economy, as opposed to leaving it in the gov't sector, which is 20%. Returns should be 4x better, as well as leveraging economic growth.
"The Republican Party of Big Stupid Government doesn't have the guts to do anything like this. They don't even have the stones to take PBS off the taxpayer teat."
If only we could have that as an option! I would gladly opt-out from EVER getting Social Security benefits myself if it meant I could keep that money and invest it as I please.
I'm 25, and my husband's 26, and we both know we will never see a penny of those mandatory "contributions" to Social Security. We'll be taxed to the hilt to pay for the boomers' retirement, and then the system will have collapsed by the time we retire.
Most people feel far too marginal too give up a "defined benefit" type of retirement plan. If the stock market tanks (or closes - markets are like companies, they can tank or even disappear), then there is no backup.
Which I saw as the plan all along. ;*)
It is also why he is being fought so hard.
Ponzi schemes always collapse, so keep an eye on the chairs because the music is about to stop.
Social Security will end, it just won't be "phased" out. It will end along with Medicare, Medicaid, and welfare in one fell swoop ... it will happen the US reaches it economic colapse in the next 30 years or so. It will happen so fast that 1930 will look like the good old time.
You and I won't be worring about "I can't believe my check ain't coming in the mail any more". We'll be worring about defending the little bit of food and water we have stored from roving bands of gangs. There will be no work, no "savings" ... just you, your family and what ever guns and ammo and provisions you stored away till some sembelence of law and order appear a few years later .... under Sharia Law!
So look at your young kids or grand kids now and think of the HELL HOLE this country will be in next few decades.
Oh, I almost forgot .... Have a nice day :)
Wait -
so he says to cut off all SS benefits to the younger generation, while maintaining their payroll taxes, and then he goes on to say he'd give the younger generation an exemption from added tax to pay down the debt?
Phasing out the retirement portion of SS is a good idea. However, is this guy asking the younger generation to pay for the older generation's benefits and receive nothing in return? Or is he proposing a new tax on the older generations ONLY that would be used to pay down debt they have incurred so as to relieve the future debt load on the younger generations? It sounds like he wants me to sacrifice my 12% contribution so that the older generations can retire with full promised benefits while I get nothing. What ever happened to SHARED sacrifice?
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