I haven't visited this forum for quite some time now, but I figured there might be a few people who still remember me. Anyway, the local newspaper recently did a story about my efforts with Social Security reform. As some of you may know, I decided to write a proposal for Social Security reform while taking a break from trading. I needed to reevaluate my goals. I have been trying to get some exposure for these ideas for a long time. And while this isn't much, I am extremely thankful and grateful for it. And I figured that there were one or two people here that would be interested to hear how the story is turning out. http://www.pactamerica.com/mission.htm By the way, the links to the newspaper site are at the top of the page, but I figured it might be better to read it on my site since I have the photo displayed and their website does not. Take Care. P.S. The story mentions my podcasting. If anyone is interested, there are several podcasts on the blog, and "PACT America Redefined" and "True Sacrifice" are probably good starters. Also available on iTunes.
Please explain. 1) I see a Ponzi scheme with the potential to bust. 2) Nowhere in the Constitution is the Federal Government given the power, or charge, to provide for citizens' retirement. Thus, Social Security is actually unconstitutional anyway. But since most people aren't aware that the Constitution is really a list of powers granted by Citizens to the Federal Government, where anything not listed is expressly disallowed, I doubt we will ever return to the Constitution as our basis for government. This is one reason I prefer private accounts. I want my money back.
1) Even though it is a âpay-as-you-goâ system, Social Security is able to provide a solid return on investment. Wages typically increase over time, and this natural appreciation creates inflation-protected returns for contributions to the system. While we are powerless to control the fluctuations of the stock market, wages are actually quite stable, and our actions do influence our earnings. http://blog.pactamerica.com/2005/10/words-of-wisdom-from-abraham-lincoln.htm http://www.pactamerica.com/wageswap.htm 2) The 16th Amendment gives Congress far reaching powers, and if we don't start to come up with some sensible solutions to our problems, we will find ourselves being taxed to the max. Aren't we already? You haven't seen anything yet. First of all, do you realize that your money has already been spent? Social Security is a "pay-as-you-go" system, which means that the money coming into the system in the form of taxes is immediately going out of the system in the form of benefit checks for retirees. The trust fund was designed to help pay for the retirements of the Baby Boom generation, but even that has been spent. Private accounts would require massive transitional borrowing, borrowing that will be paid for by you the taxpayer. Do you really want to have a private account that is essentially charging you an annual finance charge of at least 4.5%? Not to mention that you really won't have too much control over the investments in this account. There will be maybe five choices of mutual funds all chosen and approved by the government. Does that really sound like a winning scenario? I don't think so. The idea for private accounts is a non-starter. The money is just not there, and even if it were, it would not be the best idea. Check out this podcast... http://blog.pactamerica.com/2005/11/podcast-vicious-cycle.htm
Furthermore... Yes there is a demographic problem, but is it a permanent one? Not exactly. Yes, the ratio of workers to retirees will decline when the Baby Boomer generation starts to retire. But that is the intended purpose of the Social Security trust fund. However, eventually this ratio will rebound, simply because people don't live forever. Think about it.
I have to congratulate you on your persistence and dedication to a worthy goal -- improving the national retirement system so that the country's elders can live in dignity. There are millions of people who don't have the skills or inclination to be investors or traders, and yet worked all their lives and contributed to the U.S. economy. They deserve a decent pension. I have to admit the first time I encountered your ideas I thought you might have been something of a crackpot. Reading a few ideas from your website I now think there's merit to what you're proposing, at least enough merit that the academics and congresspeople ought to do more than just brush you off. I mean, anything to get them to think about SS reform is a start. Real SS reform, that is, and not the DOA debacle that Bush proposed.
============= Aftburner; Thanks for bring it up again; and as if keeping it gov only will change the fact it WILL require massive borrowing/ less benefits/ higher taxes, or all 3. Yes I agree with Pres Bush, Investor Business Daily; private accounts are the best way to go. Yes we still want private accounts and MUCH prefer the private sector for money management. R & D fed/state gov handling New Orleans ''relief' for example !!!!!!!!!; again private sector is just so MUCH more efficient again. And its not just greater efficiency of private sector; have you studied much at all what happens when you concentrate power too much , especially in a government?????????????????????????????????????????????
I would feel far more comfortable with the future of Social Security if the funds were invested in interest bearing securities instead of being backed with I.O.Us from the world's most profligate spender.
"interest bearing certificates" are IOU's. Social Security is just that "security"---not just a pension or a 401k. Social Security also includes a major insurance component: insurance against disability, and to some degree, against being poor. The point there is to spread risk, and this is why almost all employees who aren't hotshot risk-loving traders want a defined-benefit, not defined contribution plan. Who wants to take the risk that right before they retire, there is a big meltdown in equities or bonds or real estate or whatever? Social Security is actually administered very well given its constraints. Its costs are something like 0.25% of disbursements. Note: that is 0.25% of *income*/*dividends* in fund terminlogy, not 0.25% of assets! It is extremely efficient in this sense and truly "privatized" accounts would be a huge windfall to banks and brokerages and probably hurt most people's retirement. Besides, most people already have 401k's and other things and are already taking on far more risk in this generation than previous generations did. Previously, people had jobs for longer, and especially highly trained educated people very rarely found their entire occupation obsoleted our outsourced in an instant. Again, it's good to have security and insurance against the possibility that it's *your job* and your industry which would be peculiarly hit by something you had little control over.