Fixing Social Security

1/31/23

Ostriches like to hide their head in the sand. It seems our politicians are like ostriches when it comes to fiscal issues like the impending doom of the gargantuan Social Security program. Considered the third rail of re-election, it seems tampering with a program that everyone knows is speeding to a cataclysmic death, is verboten. The mere mention of addressing Social Security congers howls of pushing Granny off the cliff, a familiar phrase for the ignoramuses who merrily run the money printing presses. Still, the issue is not going away and eventually, it will blow up. Here are my proposals for heading off the fiscal Armageddon of a crippling Social Security (SS) system.

Everyone currently getting SS must continue to get it and at the same level. Instituting
“means” testing undercuts the argument the system was an insurance program that had payments made in return for guaranteed benefits. No private insurer could get away from changing the rules mid-stream and the government shouldn’t be able to do it either. That takes the argument of throwing Granny over the cliff off the table.

Eligibility for Persons under the age of 45 will need increasingly higher retirement dates to reflect longer lifespans. The increase in retirement age will be set to automatically change each year to 10 years less than the average lifespan of the US population. It locks at age 45. This provides 20 plus years to adjust retirement savings plans to those affected.

Persons under 45 will be given the opportunity to place all or part of their SS payroll taxes in privately managed investment accounts. Use of private accounts reduces the portion guaranteed in the current SS program by the percentage of taxes placed privately. (Probably will take some accounting work but let’s see which account returns more over time.)

Disability SS eligibility rules must include regular review of continued need. As ability to earn income advances with new technologies and improved health care, all abled workers must return work and SS payment stop or be reduced.

Private retirement accounts must get better tax treatment including ability to grow tax free health savings accounts, larger allocations to Roth IRAs and portability of all retirement accounts from employer to employer. These changes will reduce government outflows later in the form of other entitlements that enter the picture when people do not have sufficient resources in retirement.

Finally, and most important is for SOMEONE to tell we citizens that SS MUST be put on a more sustainable footing before catastrophic events occur. It won’t be just reduced payments on which many have counted or higher payroll taxes or both. It will be a national security event as we continue to pay Peter with Paul’s money crowding out defense, the one thing the federal government is tasked with in our Constitution.

Where is that leader and who is willing to elect them?