Brilliant "Privatized" Social Security Plan on CNN

I wish I could name the show or guest, but the plan being kicked around was brilliant. (Input appreciated if you have details on this.)

The proposal was once we pay off living people that have paid into Social Security so far, going forward we lower social security taxes and just pay $2,000 into a secure, broadly invested fund for each US newborn. Then another $2,000 per year until 18.

That maxes government payout to $36,000 per person, but everyone by 65 gets over a million once it matures.

As long as there are more working people (18 to 65) than children

That would be Paul O'Neill's idea, President Bush's first Treasury Secretary & now dismissed as a looney since that book came out and he became a 9/11 conspiracy theorist.

Pre-funding Social Security is a great idea, as long as we can keep Congress from getting their grubby hands on it and messing it up, like they did with the current Social Security plan. it would solve many problems and I don't know why it isn't being looked at--could be because acknowledging that O'Neill is brilliant confirms his comments about the Bush White House being bizarro-land.

The plan is as follows:

If we decided as a society that we were going to put $2,000 a year into a savings account from the day each child was born until he or she reaches age 18 — and if we assume a 6% annual interest rate — each child would have $65,520 at age 18. (The worst return for a 25-year investor in the stock market from 1929 before the crash to 2004 was an average of 6% a year.) With no further contributions, again with a 6% interest rate, those savings would grow to $1,013,326 at age 65.

If we began to do this now, the first-year cost would be $8 billion; that is $2,000 times the roughly 4 million children born each year. The second year would cost $16 billion and so on until we were contributing $2,000 per year to a savings account for every child from birth until age 18. When fully implemented, the cost would be $144 billion per year. To put this $144 billion per year into context, this year's combined spending for Social Security and Medicare will exceed $750 billion.

What this plan would do is "pre-fund" for the needs of old age. It solves the long-term financing problem for both Social Security and Medicare, allowing for the gradual replacement of programs like Supplemental Security Income and Medicaid and food stamps and housing aid for those over age 65. To make this work, the savings account money would need to be invested — my suggestion would be through so-called index funds. The administrative costs would be practically nothing because there's no need for a huge separate tax collection bureaucracy; the money would come from the general revenues of the U.S. government.

www.latimes.com...

That makes sense thinking back. It was Paul O'Neill.

For some reason he looked more like Bob Kerry in the piece they did, but obviously I thought that was wrong too and didn't want to say. One of those TV on, half asleep, persistent dreams where you're not quite sure if you made it up or not.

Paul O'Neill works for me though.

Thanks for the link.

Sounds like an excellent plan. Actually, there are several excellent plans out there that will probably never see the light of day due to partisan bickering.