I have a great plan for saving" Social Security.
Todays average U.S. life expectancy is 78 years. Lets make the retirement age to collect Social Security 79.
Presto. The system" is saved (or until life expectancy increases at which point we can raise the retirement age again).
Pretty dumb? Sure. But if the goal is saving" the system nothing would work better.
Wait a minute you say. Its not about the system" but about saving me my children my grandchildren my neighbors. Its about making individuals better off.
But if the point is making individuals better off why do we only hear assurances from most politicians that they will save the system?"
The solution" that I have proposed here is one extreme example how Social Security if we insist on keeping it as it is today can be saved."
How about raising your taxes to get the same amount of payout at retirement?
How about leaving your taxes the same but requiring that you pay them for a longer period of time raising the retirement age to collect?
Can you imagine getting a call from your bank that they have run out of money so in order to save your CD they have to cut the interest rate on it in half? Or that you cant cash in your one year CD for another two years?
If you wouldnt tolerate this from your bank why would you tolerate it from your government? Is it any sad wonder that the credit rating of our government bonds have been cut? You cant trust the people in charge.
So what about Texas Governor Rick Perrys claim that Social Security is a lie" and a Ponzi scheme"?
Hes right on both counts. Americans should be singing hallelujah that we have at least one politician not afraid to tell the truth.
This isnt about ideology. Its about arithmetic.
You cant hear too many times that despite what many still think Social Security isnt any kind of investment plan and there is no account that youre paying into that is yours.
Social Security is simply about current workers paying a tax that is used to make payouts to current retirees.
Regardless of what you think about the idea it was viable long ago when the size of the program was much smaller the tax much lower there were many more working Americans per retiree than today and when life spans were much shorter.
When Social Security was enacted in 1935 the tax was 2 compared to 12.4 today there were over 45 people working for every retiree compared to 3 to 1 today and life expectancy then was 60 compared to 78 today.
Because of these changing realities projections show that the system as it currently stands will be short some $20 trillion in meeting future obligations.
Any claim that Social Security will continue to work is simply a lie as Rick Perry says. Seventy six percent of Americans between 18 and 34 apparently agree because they say they dont expect anything from the system when they retire.
Businesses survive in free markets because the world changes every day and they constantly change and adjust. But government programs are frozen in time. Its why capitalism works and socialism doesnt.
Businesses in free markets also survive because they compete to deliver good products to consumers. Shouldnt Americans have a choice about where to put the 12.4 of their wages they pay in payroll taxes?
If Americans prefer getting negative returns on what they pay in order to save an unworkable government system we deserve the mediocre second rate nation we are becoming.
But I dont think most want this. Its why we need politicians with the courage to tell the truth and citizens with the courage to be free.
Star Parker is founder and president of CURE the Center for Urban Renewal and Education a 501c3 think tank which explores and promotes market based public policy to fight poverty as well as author of the newly revised Uncle Sams Plantation: How Big Government Enslaves Americas Poor and What We Can do About It.
I have a great plan for saving" Social Security.
Todays average U.S. life expectancy is 78 years. Lets make the retirement age to collect Social Security 79.
Presto. The system" is saved (or until life expectancy increases at which point we can raise the retirement age again).
Pretty dumb? Sure. But if the goal is saving" the system nothing would work better.
Wait a minute you say. Its not about the system" but about saving me my children my grandchildren my neighbors. Its about making individuals better off.
But if the point is making individuals better off why do we only hear assurances from most politicians that they will save the system?"
The solution" that I have proposed here is one extreme example how Social Security if we insist on keeping it as it is today can be saved."
How about raising your taxes to get the same amount of payout at retirement?
How about leaving your taxes the same but requiring that you pay them for a longer period of time raising the retirement age to collect?
Can you imagine getting a call from your bank that they have run out of money so in order to save your CD they have to cut the interest rate on it in half? Or that you cant cash in your one year CD for another two years?
If you wouldnt tolerate this from your bank why would you tolerate it from your government? Is it any sad wonder that the credit rating of our government bonds have been cut? You cant trust the people in charge.
So what about Texas Governor Rick Perrys claim that Social Security is a lie" and a Ponzi scheme"?
Hes right on both counts. Americans should be singing hallelujah that we have at least one politician not afraid to tell the truth.
This isnt about ideology. Its about arithmetic.
You cant hear too many times that despite what many still think Social Security isnt any kind of investment plan and there is no account that youre paying into that is yours.
Social Security is simply about current workers paying a tax that is used to make payouts to current retirees.
Regardless of what you think about the idea it was viable long ago when the size of the program was much smaller the tax much lower there were many more working Americans per retiree than today and when life spans were much shorter.
When Social Security was enacted in 1935 the tax was 2 compared to 12.4 today there were over 45 people working for every retiree compared to 3 to 1 today and life expectancy then was 60 compared to 78 today.
Because of these changing realities projections show that the system as it currently stands will be short some $20 trillion in meeting future obligations.
Any claim that Social Security will continue to work is simply a lie as Rick Perry says. Seventy six percent of Americans between 18 and 34 apparently agree because they say they dont expect anything from the system when they retire.
Businesses survive in free markets because the world changes every day and they constantly change and adjust. But government programs are frozen in time. Its why capitalism works and socialism doesnt.
Businesses in free markets also survive because they compete to deliver good products to consumers. Shouldnt Americans have a choice about where to put the 12.4 of their wages they pay in payroll taxes?
If Americans prefer getting negative returns on what they pay in order to save an unworkable government system we deserve the mediocre second rate nation we are becoming.
But I dont think most want this. Its why we need politicians with the courage to tell the truth and citizens with the courage to be free.
Star Parker is founder and president of CURE the Center for Urban Renewal and Education a 501c3 think tank which explores and promotes market based public policy to fight poverty as well as author of the newly revised Uncle Sams Plantation: How Big Government Enslaves Americas Poor and What We Can do About It.
