Mark West
Security of liberty and progress
By Mark West
Marked by cheers, jeers, laughter, and tears, the 2005 State of the Union Address emphasized a political shift that too few are mentioning. President George W. Bush amid 62 ovations detailed the very reason that he is still in the White House and that Republicans cultivated more control over Congress. President Bush's speech dealt with various ideas and multiple strategies yet shining throughout the address was a general theme that has catapulted the Republicans into power.
Modern Republicans propelled themselves into political strength by their intentional focus on progress. Republicans have become the party of ideas and vision, whereas the Democrats have become the party of obstruction, representing a complete reversal of where the parties stood a generation ago. One issue highlights the fundamental differences between the party's perspectives today.
Reacting to the Great Depression and playing upon the fears of Americans that a future depression could put them into starvation, Franklin Delano Roosevelt pushed the Social Security program through Congress. Originally, the program was supported by 16 taxpayers to every beneficiary. The program built up a surplus that has been robbed by Congress and replaced with United States Treasury Bonds. These bonds are backed by the "full faith and credit" of the people of the United States. In other words, the Congress issued I.O.U.s to the Social Security fund that they have no power to pay off other than through taxes. My dad always told me that money doesn't grow on trees and any American who believes the money will just appear to pay off these Social Security I.O.U.s is dwelling in fantasy land.
Our dilemma is that currently, the taxpayers are supporting beneficiaries through current year contributions. Rather than having a 16-to-1 ratio, we have a 3.3-to-1 ratio of payer to payee. Why is this a problem? First, the ratio is decreasing little-by-little until eventually the ratio will be turned upside down with more payees to payers. Second, the I.O.U.s represent actual debt that must be paid. Payment will come either through higher taxes or increased borrowing, neither of which are supported by many Americans. While the system isn't in crisis today, it will be in the future. If a promise made is to be a promise kept something must be done to make sure that Social Security is viable for future generations.
Hence President Bush has proposed personal accounts as part of a solution to protect the solvency of Social Security. Democrats may disagree with the concept of the program's impending bankruptcy, the fact remains that somewhere between 2042-2050 the program will have to reduce benefits from 20-30%. Bankruptcy results from one party's inability to pay what is owed. Reducing benefits by one-quarter to one-third is a symptom of a system that is en route to bankruptcy, not vice versa. Why should we wait until the program is in total crisis before we work on a solution for Social Security.
Some issues matter to most Americans when their finances are involved. Americans want security, transferability and incentive when they invest their money. Any proposal must address these issues in order to win support of the majority of Americans.
Security must be guaranteed. Americans must have the peace of mind that will assure them that they will be taken care of. Basically the program must work! Can Americans be assured without having any control over the future of their income? Possibly, but most Americans want to have a say in what happens with their money. How many of you go to the local bank and put your money into a savings account or certificate of deposit that is drawing negative interest? Yet millions of Americans are placing their money into the current Social Security program and that is what they are promised. At retirement, their benefit will be reduced 20-30%. That doesn't promote security for individual Americans.
Transferability must be an option. A common thread among parents is that they want their children to be better off than they are. Parents want their children to receive benefits at their death. Again, how many of you go to the local bank and put your money into a savings account or certificate of deposit that cannot be left to the beneficiary of your choice upon your death? Yet millions of Americans are placing their money into the current Social Security program and that is what they get. You cannot name a beneficiary to receive your Social Security benefits. Benefits currently cannot be transferred from one generation to the next.
Incentives must be offered. A major government philosophy revolves around promotion through encouragement. Tax incentives are used to encourage Americans into various lifestyles. Grants are used to encourage American innovation and achievement. If fixing Social Security is a priority, it must be expressed in the tax code. Such expression would increase the likelihood that Americans would work to fix Social Security. Isn't the incentive of positive interest the reason that we go to the bank and put money into savings accounts and certificates of deposit.
How can we apply these principle concepts to Social Security? Private accounts! Let's look at how these accounts should work.
Individual payroll tax contributions should be credited to individual accounts. Americans should be given the option of allowing the government to continue investing them as they have been in the Social Security program. However, Americans should also be given the option of opting out and placing a portion of their contributions into the same Thrift savings accounts that our representatives in Congress have the option of. Thus we protect the choice of Americans. Those who opt for Thrift savings accounts will also be opting to receive benefits cuts equal to the percentage of what they have diverted into these accounts.
Employer matching contributions to Social Security will be placed into a "poverty" account that will be drawn from for those who are in need of welfare. Thus we maintain a protection for those Americans who will be in need when they reach their golden years.
So what do we do with the earnings? Half of all earnings will be paid into the "poverty" account just as half of all losses will be taken from the "poverty" account. Thus all share in the benefits and detriments of their investments.
Congress must be locked out of Social Security. Never again should Congress be allowed to rob from the Social Security trust, thus protecting a part of the future stability of the program. Since Congress is often calling upon Americans to sacrifice for the good of America, we should call upon Congress to sacrifice for the good of America. Congresspeople should be charged a payroll tax until they have paid back all the money that past Congresses have taken out. This will help with the "transition" costs of the system. We must also establish a penalty tax on any Congress that does draw out of the Social Security trust that must by paid by the members of that session of Congress.
What about the rich? I guess that some will say they will get richer. Those who choose to opt out of receiving Social Security benefits should be rewarded by an annual tax incentive. Possibly a tax credit of $1,000 or some sort of other tax incentive would help encourage this idea.
Finally, these accounts must be transferable to beneficiaries. These will not be paid out upon death, but credited to the accounts of beneficiaries. Parents can now have the assurance that their own sacrifice will directly benefit their children and grandchildren.
Yet, most of this will never get to the floor of Congress. If we continue with the program as it is I wish that our representatives would deal with us honestly. Haven't you heard about how the elderly poor will be neglected without Social Security? Maybe we should just scrap giving money to everyone and just make Social Security a form of elderly welfare. At least then we would all realize the harsh reality of the system...it is designed to be a welfare plan in reaction to the widespread poverty that resulted from the Great Depression.
One final solution is a bit controversial. Imagine an America in which all the unborn children that were robbed through the abortion industry were now working in the economy. Social Security and many other programs would be in much better shape. Why can't we have an America in which abortions only occurred in the event of rape, incest or the real endangerment of the mother's life? Such an America would be far more prosperous and beneficial. Abortion highlights the core of the debate on Social Security. Forty years of treating children as less than human has resulted in an America where grandparents see the future troubles of their grandchildren as a less than noble cause for present action. Too much focus on the here and now, too little concern for the then and future is keeping America from real progress!
America faces an era of vision. We need visionary people to promote American principles to the next generations. Social Security is an issue of our time that we must deal with in a real and tangible way...today. True visionary patriots will discover a means for dealing with the problem in our day rather than passing an impending crisis on to our future generations.
© Mark West
Marked by cheers, jeers, laughter, and tears, the 2005 State of the Union Address emphasized a political shift that too few are mentioning. President George W. Bush amid 62 ovations detailed the very reason that he is still in the White House and that Republicans cultivated more control over Congress. President Bush's speech dealt with various ideas and multiple strategies yet shining throughout the address was a general theme that has catapulted the Republicans into power.
Modern Republicans propelled themselves into political strength by their intentional focus on progress. Republicans have become the party of ideas and vision, whereas the Democrats have become the party of obstruction, representing a complete reversal of where the parties stood a generation ago. One issue highlights the fundamental differences between the party's perspectives today.
Reacting to the Great Depression and playing upon the fears of Americans that a future depression could put them into starvation, Franklin Delano Roosevelt pushed the Social Security program through Congress. Originally, the program was supported by 16 taxpayers to every beneficiary. The program built up a surplus that has been robbed by Congress and replaced with United States Treasury Bonds. These bonds are backed by the "full faith and credit" of the people of the United States. In other words, the Congress issued I.O.U.s to the Social Security fund that they have no power to pay off other than through taxes. My dad always told me that money doesn't grow on trees and any American who believes the money will just appear to pay off these Social Security I.O.U.s is dwelling in fantasy land.
Our dilemma is that currently, the taxpayers are supporting beneficiaries through current year contributions. Rather than having a 16-to-1 ratio, we have a 3.3-to-1 ratio of payer to payee. Why is this a problem? First, the ratio is decreasing little-by-little until eventually the ratio will be turned upside down with more payees to payers. Second, the I.O.U.s represent actual debt that must be paid. Payment will come either through higher taxes or increased borrowing, neither of which are supported by many Americans. While the system isn't in crisis today, it will be in the future. If a promise made is to be a promise kept something must be done to make sure that Social Security is viable for future generations.
Hence President Bush has proposed personal accounts as part of a solution to protect the solvency of Social Security. Democrats may disagree with the concept of the program's impending bankruptcy, the fact remains that somewhere between 2042-2050 the program will have to reduce benefits from 20-30%. Bankruptcy results from one party's inability to pay what is owed. Reducing benefits by one-quarter to one-third is a symptom of a system that is en route to bankruptcy, not vice versa. Why should we wait until the program is in total crisis before we work on a solution for Social Security.
Some issues matter to most Americans when their finances are involved. Americans want security, transferability and incentive when they invest their money. Any proposal must address these issues in order to win support of the majority of Americans.
Security must be guaranteed. Americans must have the peace of mind that will assure them that they will be taken care of. Basically the program must work! Can Americans be assured without having any control over the future of their income? Possibly, but most Americans want to have a say in what happens with their money. How many of you go to the local bank and put your money into a savings account or certificate of deposit that is drawing negative interest? Yet millions of Americans are placing their money into the current Social Security program and that is what they are promised. At retirement, their benefit will be reduced 20-30%. That doesn't promote security for individual Americans.
Transferability must be an option. A common thread among parents is that they want their children to be better off than they are. Parents want their children to receive benefits at their death. Again, how many of you go to the local bank and put your money into a savings account or certificate of deposit that cannot be left to the beneficiary of your choice upon your death? Yet millions of Americans are placing their money into the current Social Security program and that is what they get. You cannot name a beneficiary to receive your Social Security benefits. Benefits currently cannot be transferred from one generation to the next.
Incentives must be offered. A major government philosophy revolves around promotion through encouragement. Tax incentives are used to encourage Americans into various lifestyles. Grants are used to encourage American innovation and achievement. If fixing Social Security is a priority, it must be expressed in the tax code. Such expression would increase the likelihood that Americans would work to fix Social Security. Isn't the incentive of positive interest the reason that we go to the bank and put money into savings accounts and certificates of deposit.
How can we apply these principle concepts to Social Security? Private accounts! Let's look at how these accounts should work.
Individual payroll tax contributions should be credited to individual accounts. Americans should be given the option of allowing the government to continue investing them as they have been in the Social Security program. However, Americans should also be given the option of opting out and placing a portion of their contributions into the same Thrift savings accounts that our representatives in Congress have the option of. Thus we protect the choice of Americans. Those who opt for Thrift savings accounts will also be opting to receive benefits cuts equal to the percentage of what they have diverted into these accounts.
Employer matching contributions to Social Security will be placed into a "poverty" account that will be drawn from for those who are in need of welfare. Thus we maintain a protection for those Americans who will be in need when they reach their golden years.
So what do we do with the earnings? Half of all earnings will be paid into the "poverty" account just as half of all losses will be taken from the "poverty" account. Thus all share in the benefits and detriments of their investments.
Congress must be locked out of Social Security. Never again should Congress be allowed to rob from the Social Security trust, thus protecting a part of the future stability of the program. Since Congress is often calling upon Americans to sacrifice for the good of America, we should call upon Congress to sacrifice for the good of America. Congresspeople should be charged a payroll tax until they have paid back all the money that past Congresses have taken out. This will help with the "transition" costs of the system. We must also establish a penalty tax on any Congress that does draw out of the Social Security trust that must by paid by the members of that session of Congress.
What about the rich? I guess that some will say they will get richer. Those who choose to opt out of receiving Social Security benefits should be rewarded by an annual tax incentive. Possibly a tax credit of $1,000 or some sort of other tax incentive would help encourage this idea.
Finally, these accounts must be transferable to beneficiaries. These will not be paid out upon death, but credited to the accounts of beneficiaries. Parents can now have the assurance that their own sacrifice will directly benefit their children and grandchildren.
Yet, most of this will never get to the floor of Congress. If we continue with the program as it is I wish that our representatives would deal with us honestly. Haven't you heard about how the elderly poor will be neglected without Social Security? Maybe we should just scrap giving money to everyone and just make Social Security a form of elderly welfare. At least then we would all realize the harsh reality of the system...it is designed to be a welfare plan in reaction to the widespread poverty that resulted from the Great Depression.
One final solution is a bit controversial. Imagine an America in which all the unborn children that were robbed through the abortion industry were now working in the economy. Social Security and many other programs would be in much better shape. Why can't we have an America in which abortions only occurred in the event of rape, incest or the real endangerment of the mother's life? Such an America would be far more prosperous and beneficial. Abortion highlights the core of the debate on Social Security. Forty years of treating children as less than human has resulted in an America where grandparents see the future troubles of their grandchildren as a less than noble cause for present action. Too much focus on the here and now, too little concern for the then and future is keeping America from real progress!
America faces an era of vision. We need visionary people to promote American principles to the next generations. Social Security is an issue of our time that we must deal with in a real and tangible way...today. True visionary patriots will discover a means for dealing with the problem in our day rather than passing an impending crisis on to our future generations.
© Mark West
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