Wednesday, December 08, 2004

A Thought For Fixing Social Security

Contrary to what the Democrats think and say, including Senator Reid, Social Security is broke and can not continue in its present form. I think I am not alone in expecting absolutely nothing from Social Security when I retire.

I have some links below; the first is a transcript of the Meet The Press show from Dec. 5th with Senator Reid speaking on Social Security with Tim Russert. The rest profiles the success of the Chilean private retirement system and how exactly it works.

As I understand the Chilean plan, it certainly seems like we could take some ideas from it and apply it to our system. I am curious, how many of you, my faithful readers, actually count on anything from Social Security towards your retirement? Enjoy the links, later................


John said...

Social Security does need reform, and private accounts are a good way to go about doing so. However, the transition costs (1-2 trillion dollars) have to be managed somehow.

Bush's idea - that we can just add them to the debt - makes little sense to me. The dollar's value is currently going down becuase our current is too large - more debt might cause it to collapse entirely.

I think both sides should give. Democrats should allow private accounts, and Republicans should allow the payrool to cover more thant the first 86K of income.

It is ridiculous - to me anyway - that a sales manager in Topeka pays the same SS payroll tax that Donald Trump pays.

The pyaroll tax cap was meant to preserve a fiction: that by paying the payroll tax, you are saving for YOUR OWN retirement.

No, it is a pay-as-you-go system, and the sooner we admit that, the better.

The Mad Tech said...

Thanks for your comment John. I agree that both sides need to come together for a solution that will last. Or at least long enough for me and Mrs. Mad Tech to collect ours.

The Mad Tech

Nathan Frampton said...

I agree that Social Security is in trouble, however, I disagree that you will receive no benefit when you retire. Think of the political ramifications if Social Security didn't exist? It won’t go away. The retiring baby boomers, making up a large percentage of our population won’t allow its demise. Benefits may go down taxes may go up but you wont see it go away.

I believe the retirement age in unrealistic. Our average life expectancy continues to increase. We can't expect to increase life expectancy, retire at 65, and have the same quality of life. The math doesn’t work. The longer we live the more money we need to earn over our lifetime. The easiest fix would be to slowly raise the retirement age to 70.