A New Sollution to Social Security

Social Security currently assume 22% of the total government budget. It's currently increasing in size by about 8-10% per year, year over year ..

Social Security payments per individual are based largely on the CPI (Consumer Price Index) which means the amount sent per person is set to adjust per annual inflation. Usually around 3-5%. If the Feds can get away with it .. they will say 0-2%. They would never set it to "real" inflation levels (10+%) because it would bankrupt the nation overnight. The next largest consumption of SS Funds is new seniors coming into the age range of payments.. which is set to increase dramatically over the next decade. If we assume 10% growth for the next 10 years, Social Security will annually cost the US Taxpayers $1.6 trillion dollars a year, far outstripping the intake of funds. This doesn't count the hundreds of billions stolen from the funds from various administrations, from Reagan to Obama.

There are numerous ideas on how to manage Social Security, especially it's growth, and the disenfranchised youth that feel they would never benefit from the fund. And indeed, few middle class citizens could retire comfortably on SS funds.. many old folks who paid in their entire lives find living off SS puts them below the poverty line.. usually just high enough to screw them over for Medicaid funding.

My solution..

Allow tax payers to turn a maximum of 25% of their earnings into the Social Security fund.. pre-tax. All tax exempt. Allow tax payers to directly control what 50% of their funds are invested in, much like a 401(k) plan would.. and guarantee those funds to specific tax payers permanently. This means no administration could ever touch it, no one else in society would benefit, regardless of how much it grows. Put a security measure in place that means the principle balance can never be lost .. the worst that could happen is 0% growth.

Take the other 50% and put it into a general fund, that the SS Administration would invest as they see fit.. these funds would be, through specific regulation, impossible to be accessed by Congress or Presidential order.. it's only for the people, no stealing. The funds would supply the money for every individual, regardless of how much you pay in, it would supply the funds for disability and so on. People paying in would always have the money they can see feel and touch, it's theirs, they invest it as they see fit. But everyone would still receive the benefits. Essentially it's combining typical retirement accounts pre-tax deductions into an officially run program by the Government, and a minimum 10% tax mandate could be applied forcing people to save for retirement..

Sadly the biggest issue in the next 30 years (and omg will it be bad when my generation retires .. mid 20's) is that we don't save, we do minimal contributions and so on because we feel the economy restricting our way of life. However mandating that we set money aside, while still having control over it is a huge benefit for the Middle Class.. meanwhile it will still support the Lower Classes because it won't be full privatization.

And it doesn't even need to be truly private, the Treasury Department can establish it's own government funds, this way private organizations can't run amok with funds. Many nations invest directly into their own economies, especially China. This would be a major boon to the Middle Class, and hopefully relieve pressure on the fund to provide decent living retirement funds to retirees which currently live below the poverty line.

Alternate solution: Soylent Green. But your way sounds pretty good too.

since congress Constitutionally controls the purse strings of the nation, the next congress could override the current one easily, it would take a constitutional amendment to keep it out of congress hands.

reply to post by CaDreamer


Sadly ... that's true.. I like to think that something as simple as mandating Congress not steal from the citizenry's retirement would be fairly easy to pass. Maybe not.

It's like condoning stealing a cookie from a child...

*sigh*

or just allow taxpayers to opt for SS at the rate they deem acceptable, and allow them to adjust it according to their wishes. Or just get private insurance.

reply to post by asperetty


That's part of what I said, a minimum SS tax of 10% (so people have to save something for themselves and contribute something for every one else 5% and 5%)

to a maximum of 25% .. considered tax deferred (even though it is, technically a tax) it would also kick in AMT.

The goal would be to get people to save for themselves and others, but be encouraged to save more at the same time.

reply to post by Rockpuck

Rockpuck - A valiant effort at trying to tackle what is presently, in our current economic predicament, an unsolvable problem. If I could, I'd give you 100 S&F just for the effort. It's refreshing to read a thread attempting to find some type of solution as opposed to the multitude of others full of useless bravado ("The revolution will come". Yeah, right - when & by whom???).

With that said, the government will never let what you're proposing happen because the loss of those immediate tax $$'s would equate to a substantial loss in revenue for good ole Uncle Sam and I just don't think they're going to let that happen. I hate to sound so cynical but we would be giving them too much credit in assuming that they're concerned about the long term benefit of their citizens. As much as I loathe to be a pessimist, I've been involved in the financial services industry for many years and as I watch them slash and limit every tax deferred vehicle currently in place under tax law (at least those which used to be feasible for the supposed "middle class"), I just don't see them allowing an additional loss of immediate tax dollars by creating more safe havens for those dollars. I'm sorry and again, an extremely respected effort on your part.

If you want to fix SS, eliminate it.

Wow, what a bunch of disinformation. While social security payments may compromise 22% of the budget, they also get funded on the other side by tax collections. Only because of unemployment do we have less revenues than expidentures and it is pretty close to even. The problem with social security is that there is not enough workers to pay for all the baby boomers retirements. So think about that for a minute. Wth less workers available, wages should rise significantly. As a result social security tax collected will also rise significantly. The simple answer to the problems with social security is to get more people working at higher wages.

My solution would be for the government to stop taking SS as of January 1st. Cut everyone a check for the amount that they have put in and say,
"Folks, we can't do it. We just can't do it and stay a representative republic. We either go all out socialism or go back to the way we were, when we used to have self-reliance and individual responsibility."

People should work, should save, and should plan for their own retirement. SS is the government (by way of pay amount) telling you where to live, how to live, what to eat, what to do.

Just my humble idea.

reply to post by sligtlyskeptical


higher wages = increased demand for goods = inflation = you're back to where you started



The trouble with socialism is that you soon run out of other people's money. -- Margaret Thatcher (peace be upon her)

Originally posted by sligtlyskeptical
Wow, what a bunch of disinformation. While social security payments may compromise 22% of the budget, they also get funded on the other side by tax collections. Only because of unemployment do we have less revenues than expidentures and it is pretty close to even. The problem with social security is that there is not enough workers to pay for all the baby boomers retirements. So think about that for a minute. Wth less workers available, wages should rise significantly. As a result social security tax collected will also rise significantly. The simple answer to the problems with social security is to get more people working at higher wages.

Really? Did the Prez not recently reveil that there is no separate trust fund for SS? Do we really believe that all of this money has remained protected? What, exactly is the difference if you have less workers with higher salaries or more workers with equalized salaries? The Boomers are by no means scooting around in wheelchairs and checking into retirement homes. The majority are still capable and productive workers who know that they can't live off of SS alone and are ready, willing and able to work into their later years and continue contributing into the system. If the employers are not willing to hire more workers, what makes you think they would be willing to increase salaries? It's an employer's market, so to speak, so why would they be willing to do this without some type of incentive? Bottom line is that there really is NO simple solution to the long term problem of sustaining SS..