Social Security v2.0

The current social security program is literaly criminal in nature. If I were to set up a private pension plan that operated in the way social security does I'd be thrown in the slammer and the key would be tossed away. Congress gets away with it of course because they make the rules. Because of this congressional control there is really no hope of any meaningful improvements. None-the-less, here are my thoughts on the matter:

The only way to make social security work is to make it into a true investment program. Of course this can't be done overnight. And I don't propose to let people make their own choices as to how best to invest for their retirement. The liberal establishment would never allow anything so remarkable as the citizens of the United States actually having to be responsible for themselves.

No, I am proposing that the government invest the money taken from workers in such a manner as to actually, over time, make the social security program self sustaining.

The first year of implementation of my plan, 1% of the money taken from workers would be invested. The actual type of investment is certainly open to debate, but even putting it into simple pass book acounts would be better than what we have now! Ofcourse it would be better to put the money into stocks with a caveat that only prefered stock could be bought for the program. This would assure that the government would have no vote in the businesses invested in and would assure that the government would get dividends whenever the companies invested in paid dividends. A second, and very important rule would be that the government could not invest in any sort of government bond or other investment. The money could only be invested in productive enterprises. The third rule is that once invested, neither the government, nor anyone else, would be able to touch the principal either to take it out to spend or even to re-invest it. Rule four would be that the government would be ahead of all other creditors and other stock holders in the event of liquidation of company assets for any reason.

Once the program is established, the amount taken out would increase by 1% every year so that in 100 years all money taken from workers for social security would go into investments. The beauty of this plan is that as retirees die, their investment does not! It continues to earn money for ever or at least as long as we have a functioning economic system. Eventually the amount invested could allow everyone to retire early and never have to pay into social security. On the other hand it could prove worthwhile to continue to have a social security tax of some amount in order to assure adequate funds to make up for those years in which investments do not pay enough to cover those pensions currently being paid. When the invested funds do earn enough to meet obligations, the amount taxed would continue to be invested to reduce and perhaps eliminate the possibility of having to pay out non-invested funds taken from workers to meet current obligations.

Of ocurse this is a long term plan and would have to stand up to every congress to come over the next hundred years but the plan would work. If you think so just pass the idea on to your Representative and Senators.