Garvey's Ghost: Black Talk

The Social Security "Fix"

Last time I posted on Social Security I admitted that I had used the wrong information to bolster my case. That is I neglected to include the mandatory spending that the Social Security Administration must do and only compared the discretionary spending of that department and the budget for the DOD. But anyways let me move from critique mode to "solution mode."

I don't know if SS will run short but lets assume it will. If it will and we asssume that "personal accounts" will close the gap then lets run with that thought for a minute. First we should reject the substitution of "personal accounts" for regular SS deductions. Why? Because as has been said before that merely guts the program by diverting funds away from SS, which will surely kill it before (and if) the Baby Boomers do. Instead I suggest that the Fed offer "private accounts" in addition to the SS Deductions. That is, let the taxpayer "opt in" for having an additional deductions from their account. This should be along the lines of what is done in NJ. What workers for the State of NJ have to do is give no less than 5% of thier gross pay to a retirement account (403b). That is in addition to what is taken for SS. So lets' make this nationwide. The Federal Government will take 'bids" by different investment houses to "service" these accounts. The reason for this is for my next proposal. Since the Fed is going to make business for these companies and requiring the tax payer to take a risk, the FED should guarantee the principal amount deducted from the taxpayers paycheck. The principal should be tax deductible if it loses and be subject to normal IRA type taxes on gains.

In this way the tax payer is protected against "market forces" of the Enron persuasion in the form of tax credits and the government can be satisfied that it has increased "SS" funding without "imposing" a tax.