resurrectionsong

February 19, 2004

Social Security Reform

Cato has a Social Security reform plan that fits my world view well.

Individuals would be allowed to divert their half (6.2 percentage points) of the payroll tax to individually owned, privately invested accounts. Those who chose to do so would agree to forgo all future accrual of retirement benefits under the traditional Social Security system.

The remaining 6.2 percentage points of payroll taxes would be used to pay transition costs and to fund disability and survivors' benefits.

Workers who chose the individual account option would receive a "recognition bond" based on the accrued value of their lifetimeto- date benefits. Those bonds, redeemable at the worker's retirement, would be fully tradable in secondary markets.

Those who wished to remain in the traditional Social Security system would be free to do so, accepting a level of benefits payable with the current level of revenue.

I'm even of an age where my investment horizon is far enough off that I would happily forgo that money that I've already paid into the system in favor of alleviating that long-term hole that Social Security is digging. Keep it all--and then let me prepare for my own retirement.

Social Security is broken, Social Security is unsustainable without wild tax increases and benefit changes, and Social Security robs the money from my pocket. Creation of heritable wealth, personal money management that would likely perform far better than "investing" in Social Security, and a reduction in the long-term tax burden that is created by the shrinking worker-retiree gap.

Someone remind me why Democrats are so opposed to Social Security reform and privatization?

Check it out for yourself. (Warning: the article is a PDF, although I've just linked to the executive summary. I'll be reading the full PDF later this evening.)

Posted by zombyboy at February 19, 2004 01:28 PM | TrackBack

Comments

I am opposed to privatization of Social Security because I lost a bunch from my 401K during the Internet bust.

Some will say that we all gambled with the stock market and lost. I say that we were robbed:
- pump-and-dump schemes were rampant and obvious, yet ignored by FTC.
- the money I lost ended up in the pockets of Enron CEOs, investment firms.
- the only profitable fund in my 401K was "Stable Value Fund" with 4% interest - so there were no meaningful investment choices.

In other words, investing was not on a level playing field - it was tilted by special interests.

Social Security money is paid by workers (us) and given back to us when we retire. All other "privatization" schemes try to get money from us, and give some of the money to some rich banker on Wall Street. This program is NOT a gamble, like all other 401Ks and IRAs. Privatizing Social Security is a scheme of the investment industry to snatch that money by repeating pump-and-dump again.

I want to know that there is a plan that one can rely on. Even if I put money into a bank, the interest probably will not outpace the inflation.

Posted by: Zoran Lazarevic - Laza at February 26, 2004 11:10 AM

The apparently paltry 4% that your stable fund gave you far exceeds the rate that SS returns. What do you get for your money? Do you even know? How much would a life insurance policy cost you per month? Disability insurance? Retirement savings? 6% of your paycheck gets you what? 12% of your paycheck gets you what? What can you get for your money on your own? The answer is a click away, and that is why the lies don't work anymore, and the conservatives control House, Senate, and Exutive.

Posted by: Arthur at September 7, 2004 04:47 AM

The apparently paltry 4% that your stable fund gave you far exceeds the rate that SS returns. What do you get for your money? Do you even know? How much would a life insurance policy cost you per month? Disability insurance? Retirement savings? 6% of your paycheck gets you what? 12% of your paycheck gets you what? What can you get for your money on your own? The answer is a click away; the lies don't work anymore, that is why the conservatives control House, Senate, and Executive.

Posted by: Arthur at September 7, 2004 04:52 AM

The apparently paltry 4% that your stable fund gave you far exceeds the rate that SS returns. What do you get for your money? Do you even know? How much would a life insurance policy cost you per month? Disability insurance? Retirement savings? 6% of your paycheck gets you what? 12% of your paycheck gets you what? What can you get for your money on your own? The answer is a click away; the lies don't work anymore, that is why the conservatives control House, Senate, and Executive.

Posted by: Arthur at September 7, 2004 04:52 AM

The apparently paltry 4% that your stable fund gave you far exceeds the rate that SS returns. What do you get for your money? Do you even know? How much would a life insurance policy cost you per month? Disability insurance? Retirement savings? 6% of your paycheck gets you what? 12% of your paycheck gets you what? What can you get for your money on your own? The answer is a click away; the lies don't work anymore, that is why the conservatives control House, Senate, and Executive.

Posted by: Arthur at September 7, 2004 04:52 AM

The apparently paltry 4% that your stable fund gave you far exceeds the rate that SS returns. What do you get for your money? Do you even know? How much would a life insurance policy cost you per month? Disability insurance? Retirement savings? 6% of your paycheck gets you what? 12% of your paycheck gets you what? What can you get for your money on your own? The answer is a click away; the lies don't work anymore, that is why the conservatives control House, Senate, and Executive.

Posted by: Arthur at September 7, 2004 04:52 AM