SOCIAL SECURITY: The Problem with Public Accounts
President Trump's promise not to cut one dime from Social Security and Medicare doesn't square with the fiscal cliff these programs are headed for. To save the system, benefits must be cut, taxes must be raised, or both.
Or else replace the system.
No wonder, then, that John Stossel insists we "Fix Social Security Before It Goes Broke," and rescues a decades-old proposal: "private accounts," which he says "would certainly pay retirees more than Social Security will ever pay."
In Chile, where they have tried this, private accounts have worked out pretty well, contributing to the once-impoverished country's rise to "the richest country in Latin America."
Had the United States adopted such a system, at Social Security's inception, the amount of capital flowing into projects big and small would have not merely prevented the stagflation of the Seventies and brought us almost unimaginable wealth, it might have turned political eyes towards accountability, prudence and stability.
But, because Social Security was set up as a Pay As We Go system, we paid . . . and the money went.
It got so messed up that by the 1980s Ronald Reagan charged Alan Greenspan with "fixing" it. That "fix" mainly meant increasing taxation. The decades of revenue surge over outflow was spent by Congress for war and handouts. And now we're reaching a repeat of the late 1970s' Social Security insolvency.
Meanwhile, Chilean leftists "hold street protests against private accounts," Stosssel reminds us. "They're angry because capitalists get a slice of the pie."
Back in the USA, Democrats demand that more benefits be wrung from Social Security. Are they dead set on proving why socialism doesn't work?
This is Common Sense. --Paul Jacobs
Founder at National School Developers
6 年The Government needs to stop using our retirement as their ever-increasing war "ATM".
Business development/capital raising/enhancement of shareholder value
6 年Well stated Michael!!!??????
In 2005, Republican President George W Bush wanted to PRIVATIZE Social Security. Had Congress and the nation followed that disastrous advice, what would have happened to those retires who have retired since that vote? When the economic bubble burst in 2007-08, many of them would have had to survive on 30 to 40% LESS retirement income than they actually received.? Republicans always talk about how good it would be to privatize Social Security. But what you happen to be unlucky enough to be someone who retires when the "market is down" - how would YOU survive? The system needs fixing, that is true, but penalizing working people is NOT the right way to do it. Most working people do not have family trust funds to support their basic lifestyle - they simply live paycheck to paycheck. ? Reform is needed and such measures as means testing for Social Security, raising the eligibility ages and yes, even tax increases to sustain Social Security, must be considered. The Social Security trust fund would indeed be solvent, even with fewer people paying in, had it not been raided mercilessly beginning in the 1980's and through today for our never ending litany of unpaid wars. Further most working people would be wise not to rely on a TV personality like John Stossel for their own retirement advice. ? Republicans like to call Democratic proposals to save Social Security "socialism" but without Franklin Roosevelt and the Democratic Party, and numerous Democratic administrations since that time,? there would be no safety net for today's seniors. Or tomorrows seniors!