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 Houses 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 cant simply tell grandma that shes on her own. No, a promise made should be a promise kept.
Weve 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.
I agree with some of what you say; certainly we're all born into different families and have different experiences in life.
My parents were definitely Depression era during their formative years (both were born in 1920); they were, as a result, both careful with expenditures and aggressive with investments as a result. Money was to be respected, not wasted, but also used as a tool to deliver benefits.
They were also the generation that has (arguably) benefited the most from Social Security, and also paid the most in, as well. My parents both retired very comfortably by the time they were sixty, and I'm working on following their example! :)
Actually part of Fairtax would fund S.S. instead of the current payroll tax for S.S. Fairtax looks to be the only way to truly save S.S., all other ways lead to bankrupcy with in ten to twenty years.
I'm 43 and would give up all benefits myself and keep paying taxes for those 55 and older. But there's another part to my deal: phase out free pills and start to privatize medicare.
So did my folks retired very well with savings and my dad earn good money but that did not prepare me!
I was raised in fear and no hope I was dylexic and my mother thought I was backward she had no clude what dyslexic was in those days just her impatience and trashing me until I left!
I was adoptived and she hated my bio mother!
BTW she is still a democrat
Exactly.
Oldsters have no one to blame but themselves by going apoplectic every time a politician says the phrase "Social Security."
No reform is possible because any attempt at reform is political suicide, therefore Social Security is doomed. But, it won't happen until the tax burden becomes unbearable in a generation or two.
You were kicked out of the Optimists Club, weren't you?
And that's where diversification comes in.... :)
Corporations will be very happy to have all that S.S. $$$ flowing into their coffers, because they'll have no obligation to us (unlike the current program). I still remember neighbors who had a retirement plan with K Mart... K Mart went through bankrupcy and re-emerged as a "different" company (even though same buildings, docks, distribution centers and Martha Stewart merchandise) - but my neighbors had nothing. It was legalized theft.
S.S. isn't an investment, it's social insurance. I don't jump on the "I'll make 10X more $$ in the stock market" bandwagon because it won't work out that way if a large fraction of us make that move... we'll be "renormalized" out of all our retirement.
Sorry, we were talking about two different things. I was talking about private investments, which we always have the freedom to make for ourselves, not what the government would "let" me do in an investment account. Those are the investments I am paying attention to, not what Social Security will or will not provide.
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