Two of my favorite columnists, Gail Collins on the left,
and David Brooks on the right, .
Click here to read the column
and David Brooks on the right, .
Let’s Talk About Social Security
By DAVID BROOKS AND GAIL COLLINSClick here to read the column
My thoughts - This problem is not that difficult. It can be resolved by:
1. Increasing the retirement age, say to 70, for workers who presently are under 50 while still permitting workers to retire at 62 with a reduced benefit, and /or
2. Decreasing the cost of living formula, and/or
3. Increasing employee / employer withholding rates.
Since I am now social security age, I prefer #3. But we do have to do something.
2 comments:
It seems to me that raising the cap on income is a no brainer. There are people who make so little it is impossible for them to save for retirement but they pay social security taxes on 100 per cent of their incomes while those making high salaries pay on only a portion. Add this to the fact that the high income folks pay only fifteen percent on investment income (which the poor do not have) and it seems to me that there is something very wrong with this picture. I have known a lot of people who have nothing to fall back but social security and they certainly don't maintain a high standard of living. I hear this option mentioned very little but it seems to me that it would be the fair way to go.
Good blog post on SS. Tom Kelly from GSU actually had a great plan 35 years ago, that if implemented would have solved the problem. First, you actually fund the system like a pension plan, not “pay as you go”. Then you invest the proceeds into bonds which are generally a safer investment than stocks. Government bonds are even safer than corporate bonds. Use the bond funds to help rebuild the nation’s infrastructure. In the mean time, use the interest from the fund to grow the retirement accounts. In 1974, with the bulk of the baby boomers still entering the work force, it would have been possible to gradually transition the system. Too late now. Of course, the problem all relates around demographics. The echo generation will be more than large enough to support the boomer generation eventually if they ever get work. To that end, the longer you make the boomers work (assuming they can find work) the more you cripple job creation at the other end of the spectrum.
Will
Post a Comment