Have you noticed that neither Barack Obama or John McCain are talking about our Social Security crisis? Why is that? It is disconcerting.
I stumbled across an article today in the Washington Times that included a solution to the looming bankruptcy of our nation’s Social Security crisis – and as I finished reading the article I came across the author’s name – none other than Bob Barr, the Libertarian Party’s presidential candidate.
Here is Barr’s plan to save our Social Security program:
True reform of Social Security requires shifting control of retirement decisions to workers and their families, moving from a government pay-as-you-go system to an individualized system of private accounts. In the long-term, this would expand freedom of choice, increase retiree returns and reduce government expenditures.
Private accounts would not be a jump into the unknown. In 1981, Chile switched from a pay-as-you-go system to private investment accounts. A score of other countries across Asia, Europe, and Latin America have followed Chile’s lead.
The principal fiscal challenge arising from private accounts would be the so-called transition cost, which is financing Social Security benefits for current beneficiaries while current workers are shifting tax payments into private accounts. There is no escaping this budget pain.
However, under my proposed reform – with a quick shift to private accounts and phasing new workers out of Social Security entirely – costs peak early and begin to diminish, in contrast to the present system, in which the red ink explodes and never ends.
Benefit cuts are undesirable, but trimming payments is more fair than hiking taxes, which would only exacerbate the system’s existing infirmities. First, we should adjust wage indexation, which increases benefits faster than inflation. Second, we should raise the retirement age, since life expectancy has increased by 18 years since 1935.Third, we should consider other benefit adjustments, such as fixing the consumer price index, which overstates the impact of inflation.
Other spending cuts – in corporate welfare, nonessential domestic programs, and military outlays for defending everyone but the U.S. – also will be necessary. If these reductions are insufficient to fully fund the transition, it might be necessary to consider short-term borrowing. Though not desirable, these obligations would be more than counterbalanced by eliminating today’s massive unfunded liabilities as a result of moving to a self-funded system.
If you are interested in finding out more about Barr’s campaign for the U.S. Presidency, go to this link.
‘Have you noticed that neither Barack Obama or John McCain are talking about our Social Security crisis? Why is that?‘
It’s because, in Beltway circles, Social Security is synonymous with the ‘third rail.’
SMS
Since I grew up figuring that I would be more likely to see a UFO than a Social Security Check, Barr’s logic is impressive.
However, the hysteria connected to such a plan every time the DOW would dip a little – meaning someone retiring THAT DAY would lose out – has always made we want to throw my hands up and walk away.
Thank God you’re coming on the Barr wagon Art. I had lost some hope for awhile. Bill Richardson for gods sake.
Social Security is a pay as you go system. The surplus has been spend and all there is to show for it is special T-bill bonds, IOU’s ALSO called “intangibles”.
Government pensions, Private pensions, your IRA.
The money in those pensions have been spent too. If you go to the vault and look you will find a bunch of stock and bonds, ALSO called “intangibles”.
“Privatizing” Social Security is ” code” for eliminating it. Most working people do not have the skills or the time necessary to adequately administer their Social Security funds. Proof is in the ABYSMAL results from 401k accounts, how many participate, fully fund and how they manage those accounts. Social Security WAS never meant to be one’s ONLY retirement savings and investment but a safety net, so this country wouldn’t have old people starving In the street. Remember Al Gore’s “lock-box”, Social Security WOULD be solvent if Bush wasn’t RAIDING it to OFF SET his DEFICITS! Obama HAS a plan for Social Security (did you bother to go to his website ) the only plan that makes sense and that is to lift the cap on paying Social Security taxes ( after reaching 97,000 dollars in income you no longer pay in ). I personally would pay more, but Social Security’s solvency is and will continue to be the only thing keeping so many seniors afloat. A just and civilized society can do no less.
Did Barr put this on paper and drop it in the hopper when he was in Congress?
McCain and Obama do have proposals, though it would be easier to take them more seriously if they had been put in black and white and proposed as actual bills. What are they waiting for? They’re both already Senators.
McCain’s position was released in the primaries as follows:
“Reform Social Security: John McCain will fight to save the future of Social Security and believes that we may meet our obligations to the retirees of today and the future without raising taxes. John McCain supports supplementing the current Social Security system with personal accounts — but not as a substitute for addressing benefit promises that cannot be kept. John McCain will reach across the aisle, but if the Democrats do not act, he will. No problem is in more need of honesty than the looming financial challenges of entitlement programs. Americans have the right to know the truth and John McCain will not leave office without fixing the problems that threatens our future prosperity and power.”
The Social Security system has always been a wealth transfer system in which working people are compelled to provide retirement money to old people. The Chilean privatization is essentially an abolition of social security as such, replacing it with mandatory IRA’s. Not necessarily a terrible idea, as long as you’re willing to let unproductive types who live a long time and run out of money in their IRA suffer with no government aid.
There’s not that much difference on this issue, and voting for Barr will not really help the social security mess. McCain is the better choice.
If McCain is the “Maverick” then is Cheney the “Rifleman” and the Bush’s “The Beverley Hillbillies” Jed and Jethro Clampett?
Perhaps Palin could be Ellie Mae?
Does anybody under 50 even remember these shows?
#4,
You’re absolutely right about the cap needing to be raised…preferably in dramatic fashion.
#4 –
‘Most working people do not have the skills or the time necessary to adequately administer their Social Security funds. Proof is in the ABYSMAL results from 401k accounts, how many participate, fully fund and how they manage those accounts.‘
… just another reason why Social Security should be offered on an opt-on basis. Good for Galveston, TX!
SMS
That was a great video! Congress may have closed the door on counties opting out. But they have not closed the door on the 10th Amendment. We need to demand that our state legislators implement a better private account alternative and tell the federal government to pound salt.
#9 Problems arise when folks “opt” out and then go belly-up, I guess you want to re-open the poor houses. Like I said before, it’s a BASIC safety net ( everyone is free to have other retirement plans ) and for S.S. to work, we ALL need to participate.