Social Security Personal Accounts
Ann Althouse complained here, and here, about the non-answers she found as to how personal accounts help deal with the Social Security solvency problem (After analyzing Senator McConnell's response, she determined they don't). Well, in my opinion, I also believe they don't - at least not in an immediate way.
Social Security is all about making people's retirement more secure. Simply put, it is trying to make sure old people have money to spend in retirement; if not for ocean cruises, then at least for covering the bills and having something left over for a movie or two. It is currently doing this through redistribution of wealth: take from the rich and give to the poor. Personal accounts are better than the current Social Security program to insure that (a good retirement) happens. By gradually starting a program such as personal accounts, over time it could work out that the Social Security program isn't even needed for the vast majority of the population.
Just think. If a worker is investing in privately owned retirement accounts his whole life (instead of SS), then suddenly dies at the "young" age of 60, all that accrued capital will be handed down to his spouse and or children, making them immediately more secure in their future retirement (assuming the funds stay in a retirement account). If the same individual dies at 80, his own retirement will be better taken care of (than with SS). Financially, he will also have to rely less on his children, helping them get ahead for their retirement. Anything left over in his account again goes to survivors.
I don't know. Maybe someone can poke a hole in this quickly thought out logic, but it seems to me that the poorest of the poor can benefit from something like this.
Maybe Ann Althouse should think more about how we can wean ourselves off of Social Security instead of a way to "...save or put more money into the program". Innovative ideas are needed: postponing retirement age, cutting benefits or increasing the SS tax are not solutions.
All we need are a few more good ideas to get us from where we are to where we really want to be: a secure retirement, for all Americans, for the long haul.
Update: Right after posting this I checked out Jib at Jiblog, and he has an excellent post on the subject, with an excellent comment by J. Rice, pretty much backing my comments above about money to pass on to heirs.
Social Security is all about making people's retirement more secure. Simply put, it is trying to make sure old people have money to spend in retirement; if not for ocean cruises, then at least for covering the bills and having something left over for a movie or two. It is currently doing this through redistribution of wealth: take from the rich and give to the poor. Personal accounts are better than the current Social Security program to insure that (a good retirement) happens. By gradually starting a program such as personal accounts, over time it could work out that the Social Security program isn't even needed for the vast majority of the population.
Just think. If a worker is investing in privately owned retirement accounts his whole life (instead of SS), then suddenly dies at the "young" age of 60, all that accrued capital will be handed down to his spouse and or children, making them immediately more secure in their future retirement (assuming the funds stay in a retirement account). If the same individual dies at 80, his own retirement will be better taken care of (than with SS). Financially, he will also have to rely less on his children, helping them get ahead for their retirement. Anything left over in his account again goes to survivors.
I don't know. Maybe someone can poke a hole in this quickly thought out logic, but it seems to me that the poorest of the poor can benefit from something like this.
Maybe Ann Althouse should think more about how we can wean ourselves off of Social Security instead of a way to "...save or put more money into the program". Innovative ideas are needed: postponing retirement age, cutting benefits or increasing the SS tax are not solutions.
All we need are a few more good ideas to get us from where we are to where we really want to be: a secure retirement, for all Americans, for the long haul.
Update: Right after posting this I checked out Jib at Jiblog, and he has an excellent post on the subject, with an excellent comment by J. Rice, pretty much backing my comments above about money to pass on to heirs.
posted by Paul | 3:40 PM
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