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.
Sell off the socialist federal forests over a 40 year period. As you retire, you get a lump sum payment to do with as you wish - no more.
It solves two problems - gets rid of a pyramid scheme and gets the government out of the communist land business.
I don't have a problem phasing out Social Security but I want every penny I've paid into it back with interest.
That's what will keep it going - the political risk of people not getting "theirs". Since you're paying it forward, and the money you are paying in is for current retirees and not yourself, the only way you'll get your money back "with interest" is if the system continues. However, if you'd be willing to stop collecting once the amount you paid in was collected, that wouldn't be too many years and it would help wind things down.
I don't see people lining up to volunteer, somehow.
LOL
In my generation they did not have all the alternatives they had in the last 20 years or so!
Being female and dyslexic my path was paycheck to paycheck taxed to death in my money making days and than the body wears out!
"We’ve also made promises to the working mothers and fathers in Generation X..."
Bend ova....baby...............
I want a Ferrari Enzo.
And a Viper as a daily driver.
Guess which of us has a better chance?
"I don't see people lining up to volunteer, somehow."
Where is the line? The reason you don't see people lining up is that it's not an option. If I could stop them from taking my money tomorrow I'd be happy to wait till I retire to get what I've paid in back, with reasonable interest of course to compensate me for having to do without the money I've paid in for all those years. Expecting interest is not unreasonable. The government deprived me of my money promising to pay me back later. They've created the expectation that we will all be paid Social Security checks for the rest of our lives in exchange for the money we are paying now. That's the deal. If they were to give me only what I've paid in and on top of that make me wait twenty something years until I retire to get it back it would only be fair that they pay me interest. It's a loan as far as I'm concerned, maybe part loan and part insurance payment. We hold up our end of the bargain by paying into the system. They need to hold up their end. They get the benefit of the use of my money today, while at the same time I am burdened by having to do without it today and I lose whatever profits I could have made from investing it. Not only that but the money I've paid in over the last twenty some odd years isn't going to be worth nearly what it was worth twenty some odd years from now when I finally retire. We should be compensated for our losses. The government should pay for the benefit it has derived from us. I'll settle for five or six percent interest compounded annually on each SSI payment from the date it was made. I would probably have done a good bit better in the stock market dollar cost averaging that money into index funds or "55 mile an hour" growth funds, but I'll settle for the lower payout.
No kiding!
If their reporting of Iraq is any indication, they'l not only say 'it's less than expected', they'll find reasons to complain about growth altogether!
Yes. Its just that the entitlement went to someone else.
SS would not be in trouble if illegals and non producers, were NOT the recipients as well as the millions of babies were NEVER aborted....
Those who considers being a Socialist Democrat should lose their voting rights!
For their thinking is incongruent!
Therein lies another problem. Look around the people you know and ask yourself, "Would they and others really take that money and invest it wisely? Would they? Or would they just blow it?
Based on what I've read about employers' complaints about how few of their employees even invest anything in offered IRA accounts, I doubt it.
There are certainly more numerous alternatives now, but there have always been some alternatives. I've heard people say that mutual funds have only been around about that long, which makes me shake my head; my parents opened a mutual fund account for me when I was three, in 1958. :)
"Look around the people you know and ask yourself, "Would they and others really take that money and invest it wisely? Would they? Or would they just blow it?"
Good point. When I've changed jobs, I've always rolled old accounts over into a separate IRA, but I think we all know people who cash it out, even though they take a tax hit by doing so.
It's actually 7.25% and 7.25% matching. It's called the self employment tax.
"As taxes go higher and higher, people will start figuring out more and more ways to avoid paying taxes."
I figured it out in 1978.
I put all the equipment, trucks, etc. into a personal leasing account and took all my compensation from the corporation in lease payments and quit taking salary and avoided all payroll taxes.
I had over 25 years of maximum payment into SS and I don't get quite what other people are drawing but still get $1,258/mo. and in 3 years have probably collected close to all that I ever paid into it.
There are certainly more numerous alternatives now, but there have always been some alternatives. I've heard people say that mutual funds have only been around about that long, which makes me shake my head; my parents opened a mutual fund account for me when I was three, in 1958. :)
***
Trust me those who grew up in the depression had a mind set and than WWII and than great many were just catching up in mind and life to land on their feet.
Those frugal tradition took a long time to come out of.
Many were not thinking about the evoling future the tried and true methods out of a farmers concept that work for century were still in play.
Most young lady were raised to stay home and the hubby provide an in many circles womens movement was ignored meaning one would never realize the impact it would have shaking up the future family unit!
If you did not have parent who had vision in those areas you were not being perpared.
Also if you grew up in a home where the mom was control freak to the point of abusive, and everyone on egg shells you did not rock the boat and if you left home the scares followed and you never seem to recover until late in lift when you are forced to slow down.
Its just all part of the process recentment would just be cancerous and non productive.
some area in our life we grow and some we still lag behind!
Life is not a cookie cutter many experience different combinations!
Good for You!
Absolutely!
However, it stands as much chance of being phased out/overhauled/changed as does the game of BINGO.
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