Social Security Reform

Or, making life better for young workers without cheating the old…

So, the big news today is that President Bush held a press conference to discuss, inter alia, social security reform.  I’m not here to comment on the current administration or its plans.  I’m here to offer mine.  Scrap the code.  Eat the loss.  Pay out what is owed.  Give everyone else a refund.

Step One: stop collecting all social security taxes, right now.  BAM!  The economy suddenly realizes approximately 10% growth, we all have more money, and businesses (especially self-employed independent contractors) recover a ton of lost capital.

Step Two: calculate the benefits due for every American, based on total actual contributions (not projections), regardless of age or retirement status.

Step Three: calculate the amount paid in by every American.

Step Four: issue every American a statement of benefits due and amount paid.  Allow a ONE-TIME-ONLY choice to receive benefits, or take back the cash paid in.

Step Five: everyone who opts to receive benefits continues to get the same checks (or if they are not yet at retirement age, will receive social security checks beginning at age 65, in amounts based on what they had previously paid in).  There is no change for these people, no change at all.  Benefits get paid out of the general Treasury fund.  This will temporarily increase the federal deficit, but the deficit will, over time, shrink as more and more of those receiving benefits move on to their final reward (die, for those of you in Palm County).  It will not be a permanent increase to the deficit.

Step Six: cut checks to everyone else.  This ends their involvement with social security, and they are on their own.  This will also be paid out of the general Treasury fund, causing an increase in the national debt (being a one-time payout, as opposed to a recurring payment).  Yes, debt is bad, but this solution is better than the mess we currently have trying to fund the broken social security program.  And the increase to the economy from that sudden influx of liquid cash will allow the government to work more towards paying off the debt, so it probably more than balances out.

Step Seven: whatever money is left in the "social security lock-box" gets put towards paying down the national debt.

Step Eight: instead of creating some newer, more durable mandatory savings plan for America, which would ultimately only further perpetuate the Nanny State, put everyone on notice that their retirement is in their own hands.  Then start TEACHING people how to save money for retirement, instead of reassuring them that social security will somehow magically provide all they need.

Step Nine: encourage people to keep working to as ripe an age as they can manage.  Who the heck ever said that when you turn a certain arbitrary age you are suddenly magically blessed with the ability to lie around on your lazy ass?  Back in the old days, you worked until either you made enough money to live in luxury, or your body became physically incapable of work.  In the latter case, if your kids weren’t there to take care of you, you curled up and died.  Now that isn’t a good option, so work until you can’t while saving money as you go to provide for your last days.  That was the original goal of social security: not to allow retirees to live without working for 30 years, but to provide a safety net for people no longer able to work to keep them clothed and fed for their last few years.  Remember now, when the system started, the average recipient lived about 3 years past the age of retirement.  Now, people tend to be healthier and fit to a riper age.  But they can start collecting retirement benefits at close to the same age (earlier, if you factor in IRA and 401(k) plans) as always.  That means that for years, decades even, people capable of working to provide for themselves, aren’t.  And somebody has to pay to keep them fed and clothed.  More often than not, the taxpayers in general are paying, thanks to social security.  Screw that.  Work as long as you can work.  I don’t care if you are 80 years old; if you are still fit enough to earn a paycheck, EARN A PAYCHECK.  Unless, of course, you were smart enough, hard working enough, or lucky enough to put together enough of a retirement portfolio to provide for your needs at an earlier age.  Then bravo for you.

Step Ten: unfortunately, there will still be some people out there who would die were it not for the benevolent hand of government.  Provide for these people.  But do it with existing, non-social-security systems.  We already have welfare.  We already have food stamps.  We already have unemployment insurance.  Consumers with excessive debt already have the protection of bankruptcy.  And Medicare/Medicaid, having already been bifurcated from social security, will still be intact (although I’ll leave reforming that monstrosity for another post).  But remember: none of our current seniors will be forced to give up benefits; no worker who hasn’t made other retirement plans will be forced to cash out; everyone who abandons the system will have a unique opportunity to invest a lump-sump of cash; the improvement to the economy will make it easier for everyone to earn a living and to buy a good standard of living.  We won’t need social security, in addition to the other safety nets, to ensure that seniors can survive their twilight years.

There you have my ten-point plan.  It’s a good plan.  It’s a working plan.  But we will never see it come to fruition, because no politician currently in office has the intestinal fortitude to ever suggest winding down a failed government program of this magnitude. 

So elect me.

Comments

[sarah]

[Deleted by Gullyborg. Resistance is futile!]

[jeff]

[Deleted by Gullyborg. Resistance is futile!]

[Gullyborg]

You are all welcome to add commentary to any of my posts. But such commentary is limited to discussion of the post. Advertisements shall henceforth be subject to new terms of use. See here:

http://gullyborg.typepad.com/notice%20to%20advertisers.doc

[Troy]

Interesting idea, but it all rests on one fallacy: that social security is in trouble. If congress wouldn't keep raiding the thing(beginning in the Reagan era) we wouldn't even be discussing the "problem" of this program. If the feds really want to save it they would make it off limits for pillaging. Otherwise, this is nothing but a cynical Wall Street money grab. And I suggest you do a little reading on what life was like for the elderly before social security (outside of the rich folk). For somebody who professes to be Christian, your tone towards the less fortunate is surprising. I do believe that's who Christ spent his years ministering to and I don't believe his message was "put up or shut up."

[Gullyborg]

God helps those who help themselves.

So... there is no social security problem, and I'm not "really" a Christian...

riiiiiggggghhhhttttt...

perhaps you need a few more hits off the bong before you troll in here and flame me... there may yet be a few brain cells not yet destroyed in that thick skull of yours.

[chico and the man]

i think brad delong said it best when he likened our 600b general fund deficit to an impared driver who just crashed us into a tree, and our long run social security deficit to a slow tire leak.

http://www.j-bradford-delong.net/movable_type/2005-3_archives/000115.html

[Gullyborg]

I think it is hilarious how many libs, who have been running on "saving social security" for a generation, are now saying "there is no problem with social security." Didn't Bill Clinton say in 1998 that the four words he vowed to live for were "save social security first?" Oh, he must have magically saved it in that ironclad lockbox.