I love ya, Mr. President. But I can't support your "private accounts" scheme.
Here is what I understand the (ethereal) plan to be. A person will be "allowed" to invest up to a third of his or her payroll taxes (currently 12.5% of your pay) in what the government will deem acceptable as private investments. The thrust of this is to see to it that everyone has a comfortable amount of retirement income beyond Social Security. Just what those investments will be or what the rules governing their use will stipulate has yet to be determined.
Private investments are a good thing, as exemplified by the fact that most citizens have them now in the form of 401-k's, IRA's, mutual funds, etc. And if you understand that Social Security is only a savings plan with no accrued interest, you know that you will theoretically get out of it only what you put in. The same as if you had stashed it under your mattress. Stocks, bonds, treasury notes, etc. have proven to be great investments and a good source for retirement income.
I encourage everyone to invest in private accounts - early and often.
But you don't need the government to do it for you.
And private account investments will not "fix" Social Security. Every dollar that you take away from your Social Security "account" to invest elsewhere is a dollar that will become part of our federal debt. That is the amount of money that you owe yourself. The shortfall is going to amount to a staggering $2 trillion. Trillion. As in $2,000,000,000,000.
Besides, the real problem with Social Security is one of demographics, not dollars per se. We will soon have only two taxpayers for every elderly taxpayee - or Social Security recipient. The burden that will be placed on those two poor suckers is enormous - and unsustainable.
So we get back to what I've been saying all along. There are only three ways (excluding gimmicks like private accounts) to fix the problem. They are:
- Raise taxes on those same few suckers.
- Reduce benefits to the elderly (who will be depicted by the Democrats as being forced to choose between their meds and dog food for supper).
- Increase the age of eligibility.
I hereby go on record recommending the third. We need to raise the age at which a person begins collecting Social Security to 72.
As a person who sees retirement approaching (on the distant horizon), I speak as one who should be looking forward to a comfortable retirement nestegg - including that which is owed me by the government in the way of Social Security. But I can't help but think of the burden that I will be placing - a harsh burden - on my children and grandchildren. I won't do it.
So, raising their taxes won't help. And increasing the federal debt by $2 trillion won't help them either. If I were king, I'd scrap the system alltogether and teach Americans how to wisely invest for their retirement. But I'm not king. I'm only a potential sponge who will be living off your hard-earned income sooner than you would care to know.
You wanted my opinion. You now have it.