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Fixing Social Security The FDR Way
Washington Post ^ | November 26, 2007 | Amity Shlaes

Posted on 11/26/2007 3:00:11 PM PST by Delacon

Older Americans tend to think of Social Security as something we ought to be able to afford. Indeed, many seniors tell themselves that when Washington pours extra cash into the New Deal pension program, the action is something like investing in a new Volvo. The purchase may look extravagant but is, in reality, deliciously necessary. This attitude is also held by some of our most respected pension officials. The longtime Social Security Administration commissioner Robert M. Ball wrote on this page recently that "it's the essence of responsibility, in my view, to insist on no benefit cuts" ["A Social Security Fix for 2008," Oct. 29].

Ball is partially right. American retirees can have a Volvo. There is a way to keep Social Security with no benefit cuts. It is the upgrade that's the problem. There is no way the country can afford a newer model for each new cohort of retirees. Not when the economy grows at a rate of 1 percent or 2 percent or 3.9 percent -- the rate it expanded in the third quarter this year. The reasons for this trace not as much to the New Deal as to postwar authorities, including Ball himself.

Franklin Roosevelt explicitly limited Social Security's commitment, saying in August 1935 that the goal of the new program was not a total pension but "some measure of protection to the average citizen and to his family." I.S.C. 9, the legendary pamphlet that laid out the program, likewise delineated a ceiling on Social Security payments through the decades. "You and your employer will each pay three cents on each dollar you earn, up to $3,000 a year. That is the most you will ever have to pay," it said.


(Excerpt) Read more at washingtonpost.com ...


TOPICS: Business/Economy; Culture/Society; Editorial; Government
KEYWORDS: fdr; greatsociety; lbj; socialsecurity; ssisaponzischeme
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I don't altogether agree with Kudlow on this but he makes some good points. We forty somethings(and under) are going to have to pay for the boomers and those before who will have put in less than they took out. What Kudlow doesn't acknowledge is that despite FDR's rhetoric, he fully expected that SS would end up the way is has, with everyone completely beholding to the federal government as that one demographic everyone intends to be a member of...old age. That's why dims hate any talk of caps, either on income or benefits or about private accounts. It changes SS from a societywide income stream that obligates the people to depend on it, to a "poor old people's" tax which is what it should be. If you want big government that pervades every aspect of society you have to maintain that EVERYONE needs social security. Tax everyone but only return benefits to an arbitrary income bracket and you break the socialist chain. It becomes just another tax to help those weakest in society which we are used to. I am far from a tax the rich voter but hell Warren Buffet and Bill Gates are entitled to BIG SS checks and retiring Boomers are going to be the richest demographic in US history. Why should they want, need, or deserve SS? And as cons how can we support the current system as it now stands when we know it drives people from the cradle to the grave into the hands of big government largess.
1 posted on 11/26/2007 3:00:13 PM PST by Delacon
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To: Delacon
Why should they want, need, or deserve SS?

Because, damn it, we paid for it!

2 posted on 11/26/2007 3:05:31 PM PST by Rudder
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To: Rudder

No you did.


3 posted on 11/26/2007 3:08:32 PM PST by Delacon (“The attempt to make heaven on earth invariably produces hell ” Karl Popper)
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To: Delacon

That’s right, I did pay for it.


4 posted on 11/26/2007 3:12:24 PM PST by Rudder
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To: Delacon

We forty somethings(and under) are going to have to pay for the boomers and those before who will have put in less than they took out.

As a boomer who has maxed out payments into SS for 30 plus years I won’t recover what I put in if you also figure the interest I would have earned on those dollars at just 5%. You also have to consider my employers has matched my contribution over the same period.
No I won’t be seeing everything I put in.
The generation before us did take more than they ever contributed.


5 posted on 11/26/2007 3:15:41 PM PST by Recon Dad (Marine Spec Ops Dad)
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To: Delacon

The longtime Social Security Administration commissioner Robert M. Ball wrote on this page recently that “it’s the essence of responsibility, in my view, to insist on no benefit cuts...”

Hmmmmm.... That’s what we’ve been doing for 74 years. So far, it’s not worked, and in fact, that’s what got us into the mess to begin with.


6 posted on 11/26/2007 3:18:13 PM PST by Brilliant
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To: Delacon

The FDR way was to set the age of retirement a couple of years past the estimated life expectancy.

Raise the retirement afe to 80 and SS is fixed!


7 posted on 11/26/2007 3:19:42 PM PST by dalereed
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To: Delacon
Franklin Roosevelt explicitly limited Social Security's commitment, saying in August 1935 that the goal of the new program was not a total pension but "some measure of protection to the average citizen and to his family."

In other words, it will buy your food, but it won't pay your rent. Were that goal kept in mind, the fix would be easy.

Rent can be dealt with by your subprime mortgage bailout check, delivered under separate cover. ;)

8 posted on 11/26/2007 3:20:12 PM PST by Mr. Jeeves ("Wise men don't need to debate; men who need to debate are not wise." -- Tao Te Ching)
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To: Delacon

“The Social Security program might have been able to afford this if American families had continued to produce three, four or five children. But they did not. Families shrank.”

So the New Dealers assumed in their calculations that we would have exponential population growth from then to infinity? Not the brightest bunch afterall.


9 posted on 11/26/2007 3:24:42 PM PST by Brilliant
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To: Delacon

“Americans have an exaggerated sense of respect for the New Dealers who created the original Social Security model. Questioning them or the Great Society heroes seems impolite.”

Only if you are a rabid liberal.


10 posted on 11/26/2007 3:25:45 PM PST by Brilliant
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To: Recon Dad

Don’t worry... The aliens in their UFO’s will save you:

“a much-publicized poll suggested that more members of Generation X believed they would see a UFO than believed that Social Security would help them when they retired.”


11 posted on 11/26/2007 3:27:15 PM PST by Brilliant
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To: Rudder

“That’s right, I did pay for it.”

So you are saying you paid in as much as you have or will have gotten out before you die? If you died a week ago and this is your ghost typing you can not have PAID for it. Your generation and the ones prior to that AND my own are in the process of spending up all those accumulated ss tax dollars on other things as well. You haven’t paid for your benefits that you may have recieved to date. Your SS money went to pay for a highway built in 1997 or some such. Even if you said that you shouldn’t be faulted for your money being spent on other things, but that you should get back exactly what you paid in for the SS taxes you spent over your lifetime, there is the highest probabilitly that you will spend more than you paid in post retirement. In short, you won’t have paid for it. I will.


12 posted on 11/26/2007 3:28:43 PM PST by Delacon (“The attempt to make heaven on earth invariably produces hell ” Karl Popper)
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To: dalereed

“Raise the retirement afe to 80 and SS is fixed!”

Or, stop your SS benefits when you exceed that average life expectancy age at the time you started receiving benefits.


13 posted on 11/26/2007 3:32:17 PM PST by Delacon (“The attempt to make heaven on earth invariably produces hell ” Karl Popper)
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To: Brilliant

Don’t worry... The aliens in their UFO’s will save you:

I sure hope so. The politicians......wait, that’s who you were referring to.


14 posted on 11/26/2007 3:35:18 PM PST by Recon Dad (Marine Spec Ops Dad)
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To: Recon Dad
You won't get anything if you die before you are eligible to collect your "pension." Someone could pay into SS for 50 years and only collect a small burial allowance. You don't own your SS contributions. They belong to the USG per SCOTUS decision on Flemming vs Nestor
15 posted on 11/26/2007 3:36:10 PM PST by kabar
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To: Brilliant

Oh I question the sense of the New Dealers, The Great Society freaks, and pretty much all the people that set this government up before I reached voting age and then some. They set up a failed system and I don’t see why I should have to pay for it.


16 posted on 11/26/2007 3:36:38 PM PST by Delacon (“The attempt to make heaven on earth invariably produces hell ” Karl Popper)
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To: Delacon
Left unsaid is that monthly SS payroll deductions have exceeded payments to seniors for decades. Rats and pubbies alike rolled the excess into the general fund. Poof! Gone.

The very same congressional blowhards that held Enron up for ridicule and prosecution have misappropriated many thousands of times more. Commingling of funds is illegal, unless one is congressman. D@amn them all.

17 posted on 11/26/2007 3:37:53 PM PST by Jacquerie (Terry Schiavo - Murdered by Judge George Greer.)
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To: Delacon; Rudder

Lots of people get screwed when it comes to SS. My grandmother for instance.

My grandfather dropped dead from a heart attack at the age of 59. He never saw a dime of his SS. He was self employed and payed in the maximum amount.

My grandmother never earned a paycheck once in her whole life. She lived off their savings untill retirement age, then filed for SS. You know what she got??

THE MINIMUM!

You know why? Because she herself never earned a dime and therefore never paid a penny into SS. The fact that her husband WAS her income and paid the MAXIMUM did not matter. He got nothing back because he died too soon. And she got the minumum and was told to feel blessed for the charity.

That’s bullsh1t in my opinion.


18 posted on 11/26/2007 3:42:03 PM PST by mamelukesabre
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To: Jacquerie

I believe you are correct.

The IRS never should’ve had anything to do with SS taxes. The system was doomed when they did.


19 posted on 11/26/2007 3:43:38 PM PST by mamelukesabre
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To: Delacon

We didn’t set it up either and you have to pay for it the same we have for the past fifty years. So go ahead and bitch, it will get you just as far as it got us.


20 posted on 11/26/2007 3:57:19 PM PST by ontap (Just another backstabbing conservative)
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To: Delacon

I agree. I just wish you Xers would assert yourself now so that I don’t have to pay taxes between now and the time I reach 65 in 15 years for the benefits I will never receive anyway. But if I’m reading the polls right, the Xers are by and large Democrats.


21 posted on 11/26/2007 4:03:11 PM PST by Brilliant
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To: Recon Dad
“No I won’t be seeing everything I put in.”

BINGO...

You are correct.

If the amount you paid in (plus the employer’s portion) over the last 30 odd years had been invested and not pi$$ed away by the crooked politicians, your account would be worth millions now.

Your money and everyone else’s money was stolen.

22 posted on 11/26/2007 4:03:50 PM PST by babygene (Never look into the laser with your last good eye...)
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To: mamelukesabre
“My grandmother never earned a paycheck once in her whole life. She lived off their savings untill retirement age, then filed for SS. You know what she got??

THE MINIMUM!”

I think you are wrong on this... She would get 1/2 of his benefit. If he had had 3 wives married to each for at least 10 years, each would get 1/2 of his benefit.

23 posted on 11/26/2007 4:09:10 PM PST by babygene (Never look into the laser with your last good eye...)
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To: Delacon

The hell we didn’t. It was those that first entered that did not pay. I paid for over 40 damned years. Tell me I didn’t pay for mine!!!


24 posted on 11/26/2007 4:11:55 PM PST by RetiredArmy (If Marxist's Dimocrat Party & the Fed Gov want my guns, COME AND TRY TO GET THEM!)
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To: babygene

My dad said she should’ve argued with the SS. But she didn’t. She’s been dead a long time now.

But one thing we should keep in mind is that the difference between max and min keeps getting larger as time goes on. The top tier for pay-in has changed too.


25 posted on 11/26/2007 4:16:37 PM PST by mamelukesabre
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To: babygene

You are soooooooooo correct. I could retire at 50 with a few million but now I will be lucky to retire at 65 with maybe enough to live a decent life. No millions. The .gov stole my FREEDOM.


26 posted on 11/26/2007 4:18:04 PM PST by therut
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To: Delacon
Monthly benefits didn’t start until 1940

We had a built in population of approx 9 million that were 65 or older. by the time 1940 rolled around.

If you were born in 1900, your life expectancy was approx 48 years.

If you were born in 1950, your life expectancy is approx 66 years.

Seems to me the dead was suppose to pay for those who continued to live.

Probably would have worked too, except they turned SS into a bazillion other things unrelated to pure retirement.

Now, with that said, my life expectancy, after having attained my current age, is,. approx 73 years...
so...all you youngsters...get back to work !!

27 posted on 11/26/2007 4:19:46 PM PST by stylin19a
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To: dalereed
winner

then it's Soylent Green time
28 posted on 11/26/2007 4:23:27 PM PST by stylin19a
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To: Delacon

Lord aren’t we sounding like a bunch of govt addicted liberals. “I paid in, I want whats mine!”. Believe me I do speak with the sanctimony of someone who was born on the cusp of the boomer generation and who knows that all the boomers who have sucked SS dry will have mostly died off and all the resentfull Xers and younger generations will hold a political block that will make sure that whatever changes that havent already happen will screw me to the wall when I reach retirement. That said, the first thing a con should be thinking is how we can break ourselves from the SS system entirely, NOT how we can get out what we paid in. Our best objective as cons is to aspire to leave a legasy of good government. Thats what cons do.


29 posted on 11/26/2007 4:26:55 PM PST by Delacon (“The attempt to make heaven on earth invariably produces hell ” Karl Popper)
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To: babygene
If they try to cut me out of the pittance they will graciously give me in a year or two I will go postal. I won’t place blame based party affiliation I will go after my representative for not looking out for my interests.
30 posted on 11/26/2007 4:28:45 PM PST by Recon Dad (Marine Spec Ops Dad)
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To: RetiredArmy

“The hell we didn’t. It was those that first entered that did not pay. I paid for over 40 damned years. Tell me I didn’t pay for mine!!!”

No, you paid for the New Deal, and the Great Society. You fools allowed your govt to take your SS tax money and the tax money from the companies you worked for and let it get spent on everything else BESIDES a retirement pool. We fools are allowing our govt to do the same thing and spend MY SS taxes on other things. I propose we change that even if it hurts my retirement AND yours.


31 posted on 11/26/2007 4:36:47 PM PST by Delacon (“The attempt to make heaven on earth invariably produces hell ” Karl Popper)
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To: Brilliant

“I agree. I just wish you Xers would assert yourself now so that I don’t have to pay taxes between now and the time I reach 65 in 15 years for the benefits I will never receive anyway. But if I’m reading the polls right, the Xers are by and large Democrats.”

Not an Xer. I am caught in the middle. Believe me just as soon as enough boomer/hippy/libby/(need the govt to pay for everything) 60s teen scumbags have died off to make a disenfrancised minority, you will see Xers become fiscally responsible.


32 posted on 11/26/2007 4:46:22 PM PST by Delacon (“The attempt to make heaven on earth invariably produces hell ” Karl Popper)
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To: Brilliant
so that I don’t have to pay taxes between now and the time I reach 65 in 15 years

What are you gonna do for that last year? You don't qualify until after your 66th.

33 posted on 11/26/2007 4:48:41 PM PST by woofer (Earth First! We'll mine the other eight later.)
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To: Delacon

I’m more in favor of confiscating all money, property and goods of the crooked politicians and bureaucrats that stole the SS money and then bringing back slavery and making these crooks work for the victims until they dropped dead. And after they dropped dead I’d hang them.

But that’s just me.

I’m also in favor of digging up FDR and hanging him, too.


34 posted on 11/26/2007 4:54:58 PM PST by sergeantdave (The majority of Michigan voters are that stupid and the condition is incipient and growing.)
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To: Delacon

No jackass, I didn’t allow the government do it. No one here did. All those years, everyone was under the impression that the SS money actually was going into some type of account for SS. That is what we were lead to believe. But, it was put into the general fund and paid for their other socialist programs. I paid for my damned SS. If I had been allowed to put that money into an account and invest it myself, I would have a hell of a lot more money now in that account that the damned government is going to pay me over the next few years, and when I die, my family would have had that money. The idea and hope of the stinking government is that we die before we draw too much of it. But, I paid for it. I have the pay stubs to show it. What you paid for in your country, your remarks seem to point to that, that is your problem. Not mine.


35 posted on 11/26/2007 4:55:25 PM PST by RetiredArmy (If Marxist's Dimocrat Party & the Fed Gov want my guns, COME AND TRY TO GET THEM!)
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To: dalereed

There’s no doubt in my mind that if FDR were alive today his plan to “fix Social Security” would include government-run health care and mandatory euthanasia.


36 posted on 11/26/2007 4:57:38 PM PST by Alberta's Child (I'm out on the outskirts of nowhere . . . with ghosts on my trail, chasing me there.)
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To: Brilliant
I am a Generation X-er, and I can assure you that I am "asserting myself" now.

My goal every year is to substantially increase the portion of my income that is not subject to payroll taxation (Social Security and Medicare). It's working very well, thank you.

37 posted on 11/26/2007 5:01:02 PM PST by Alberta's Child (I'm out on the outskirts of nowhere . . . with ghosts on my trail, chasing me there.)
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To: Delacon

You go to a store and pay money for a TV. The clerk pockets the money. You still paid for the TV. I go to work and I pay money for SS, the govt spends it, I still paid for it. When I got my SS the govt sent a paper that listed how much I paid, then it said that because I paid a given amount I would get so much a month. I paid for that, what the govt does with the money I paid for SS is beyond my control, but I still paid for it.


38 posted on 11/26/2007 5:03:10 PM PST by Rudder
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To read........


39 posted on 11/26/2007 5:03:54 PM PST by Rick_Michael (The Anti-Federalists failed....so will the Anti-Frederalists)
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To: RetiredArmy

“All those years, everyone was under the impression that the SS money actually was going into some type of account for SS. That is what we were lead to believe.”

Under the impression? Lead to believe? Whose the jackass then?


40 posted on 11/26/2007 5:07:47 PM PST by Delacon (“The attempt to make heaven on earth invariably produces hell ” Karl Popper)
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To: Rudder
“Why should they want, need, or deserve SS?”

“Because, damn it, we paid for it!”

True enough, but you didn’t pay for your OWN SS—you paid for your parents’. The government has no contractual nor legal obligation to pay any SS to anyone. It is, in the final analysis, an income transfer program from the young to the old.

41 posted on 11/26/2007 5:09:32 PM PST by Forgiven_Sinner (The most incomprehensible thing about the universe is that it is at all comprehensible.)
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To: mamelukesabre
Because she herself never earned a dime and therefore never paid a penny into SS. The fact that her husband WAS her income and paid the MAXIMUM did not matter. He got nothing back because he died too soon. And she got the minumum and was told to feel blessed for the charity.

One more excellent reason to privatize the system.

If your grandfather had been paying into a privatized system, he would've owned the fund. And, like everything else in his estate, it would have accrued to your grandmother upon his death.

But it wouldn't have given the Democrats a single vote. So, they'd never agree to privatization.

42 posted on 11/26/2007 5:24:44 PM PST by okie01
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To: Forgiven_Sinner

Spoken like a true bureaucrat.


43 posted on 11/26/2007 5:25:33 PM PST by Rudder
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To: Forgiven_Sinner

“The government has no contractual nor legal obligation to pay any SS to anyone. It is, in the final analysis, an income transfer program from the young to the old.”

No. Its an income transfer from the young to a massive debt of the older generations with no plan for parity for the young from future generations. If the old farts(cons and libs) can live with that(and I am sure they can) so be it. My aim is to thwart them on this.


44 posted on 11/26/2007 5:28:27 PM PST by Delacon (“The attempt to make heaven on earth invariably produces hell ” Karl Popper)
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To: Delacon

Fix it the Republican, conservative way. Cut Social Security taxes. Cutting taxes raises revenue, right? I don’t understand why no GOP Presidential candidate is proposing this. It’s the only way to fix Social Security.


45 posted on 11/26/2007 5:30:24 PM PST by brightonbill
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To: Brilliant
“Americans have an exaggerated sense of respect for the New Dealers who created the original Social Security model. Questioning them or the Great Society heroes seems impolite.” Only if you are a rabid liberal.

Heck, they don't even have to be rabid in my neck of the woods.

46 posted on 11/26/2007 5:39:29 PM PST by pilipo
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To: brightonbill

It is just a tax. Like all the other taxes we pay. It is not a fund that anyone pays into. In the minds of the FDR addled generations that grew up on it when the tax paid more into the federal coffers than it took out. It didn’t matter that it wasn’t a retirement pool. That it was just another way to sap billions of dollars from the people and pay for All government spending. Sure, they didn’t care because they knew it wouldnt matter for them when the bill came due. Now the bill is coming due and the boomers are using their considerable political might to make sure the bill gets handed off to the next generation. Their retirement will cost more than all the revenues coming in can pay for when you take in all other required spending like defense and entitlements.


47 posted on 11/26/2007 5:47:39 PM PST by Delacon (“The attempt to make heaven on earth invariably produces hell ” Karl Popper)
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To: Delacon
That said, the first thing a con should be thinking is how we can break ourselves from the SS system entirely, NOT how we can get out what we paid in. Our best objective as cons is to aspire to leave a legacy of good government. Thats what cons do.

Cons are, pubbies aren't. We are in a significant minority. That doesn't mean we should quit though.

48 posted on 11/26/2007 5:50:54 PM PST by pilipo
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To: Delacon
“The government has no contractual nor legal obligation to pay any SS to anyone. It is, in the final analysis, an income transfer program from the young to the old.” No. Its an income transfer from the young to a massive debt of the older generations with no plan for parity for the young from future generations. If . . . . .(cons and libs) can live with that(and I am sure they can) so be it. My aim is to thwart them on this.

You really need to consider another perspective when isolating descriptive monikers. The political construct is not just cons and libs. As a practical matter it is a matrix of cons,libs,pubs, and dems. There are no moderates. Additionally, there are the reactionary and radical components. Also, you need to add the judicial elements and fifth columnist (or 4th estate, your call) media to the matrix.

Now, when you've composed your matrix, run an analysis using as many demographics as possible, you'll see that the solution does not lie in the political realm.

49 posted on 11/26/2007 6:10:50 PM PST by pilipo
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To: Rudder
“True enough, but you didn’t pay for your OWN SS—you paid for your parents’. The government has no contractual nor legal obligation to pay any SS to anyone. It is, in the final analysis, an income transfer program from the young to the old.”

“Spoken like a true bureaucrat.”

I’m just trying to set people’s expectation correctly—the government has no obligation to pay anything. This has been tried in court and there is no legal agreement nor ownership of the money you’ve paid into SS.

Now, my solution is to 1) don’t spend the surplus money that SS is now collecting; 2) means test SS benefits—don’t pay out if the person has income in excess of -——— (pick a number). I’d say less that a million, more than $200,000. 3) Allow people to devote up to 2% of their SS tax to a personal IRA account. They may select any stock or mutual fund. It defaults to an index of the top 3000 stocks. The money this generates goes into their account. 4) Freeze SS benefits. No more inflation adjustments. 5) Any deficit that occurs (between payouts and income) will come from the general fund, funded by spending cuts. 6) Once the people with the retirement accounts retire, the government no longer has to pay SS nor tax for it, since the benefits from the accounts will exceed the SS benefits. People will still “have” to save 2%, but not the 6% plus the 6% of the company they work for. 7) The incredible increase in savings in the US will greatly benefit the economy. I’m not sure how Pres. Bush failed to sell this before.

That’s my story and I’m sticking to it.

50 posted on 11/26/2007 6:23:25 PM PST by Forgiven_Sinner (The most incomprehensible thing about the universe is that it is at all comprehensible.)
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