We have heard for decades from politicians on both sides that Social Security was untouchable, that is was the 3rd rail of politics. We’ve also been subjected to claims from the Democrats that the program is hugely popular and that to propose even modest reform would bring on the wrath of grandma and grandpa. We are regularly subjected to tales of desperate seniors forced to eat dog food or choose between medications and food so as to play on the sympathies of voters and prevent even modest changes to the program to extend its solvency.
We all know though that the system is unsustainable as the number of workers per retiree has plummeted since the program’s inception and will be at its lowest ratio ever as the Boomers begin retiring.
The unfunded liabilities of the system for those of us still in the work force run into the tens of trillions of dollars. It’s well past time for some changes.
I have what I believe to be a modest proposal to over time, retire the system, prove the Democrats claims about the program’s popularity to be false, and to reduce drastically the program’s unfunded liabilities.
Now of course I haven’t done all of the math but my proposal seems rational to me and has a little something for everyone.
1. Make participation in Social Security optional. This is among other things a moral issue. Why should any American be forced to participate in any government program? Are we not free citizens? Is our income not our property? Are we not largely adults responsible enough to plan for our own retirements? Participation in Social Security is government coercion.
2. Those that opt out will have to forgo all previous contributions. This will keep many, if not most, middle-age workers in the system. It will depend on their doing the analyses to determine what would be best for them financially. This also eliminates those that opt out as future liabilities.
3. Require employers to continue funding their portion of the FICA tax until all participants have passed away. Yes, we all know that the employer contribution is really an employee’s salary that he is never paid but this provision should garner some Democrat support due to the continuing program funding.
4. Ideally we'd also raise the retirement age and in a bow to fiscal reality, implement a means test so younger workers aren't subsidizing grandma and grandpa's vacations to Maui.
That’s it! Let’s test the Democrat’s theory on how popular Social Security is. With only 34% of those between 18 and 34 expecting to ever receive any benefits I guarantee most if not all younger workers will opt out immediately. Their investment in the system will have been low so the choice to opt out for them would be a real no-brainer? I suspect that many higher earning workers over 34 will also opt out and divert their FICA taxes to their 401ks, IRAs or even extra appending. I’m 46 and I’d opt out immediately and divert my money to my 401k.
The Democrats don’t really care about the financial well being of Americans, what they really crave is control and the ability to use Social Security as a tool to drive voting.
Let’s push ideas like this that increase our freedom of making our own life’s choices and to break the back of the Democrat party’s demagoguery.