Allowing FDR to rest in peace
July 28th, 2007 by Eric
With the problems in Iraq, the imminent threat of global warming, the Attorney General scandal, the… well, I could go on for pages, the debate about what to do with Social Security seems to have taken a relative backseat. But the reality is that two-thirds of retired Americans rely on FDR’s plan for at least half of their income, while twenty-two percent, that’s 1 out of 5 retirees, rely on it exclusively. To put it differently the vast majority of retirees would be living in poverty without Social Security.
I don�t have to tell you how many ideas have been floated that would make the program permanently solvent: raising the retirement age; lifting the $90,000 tax base; and cutting some of the benefits are just a few. All of the options that have been presented on how to fix Social Security will anger someone, and those “someones” vote. But none of these proposals are as unpopular as the President’s “private account” proposal. Me? I’m all for it.
Before you go flooding my inbox with angry letters calling me a fascist (we have limited bandwidth), please, let me qualify. I’m 100% dead-set against privatizing Social Security, but I’m 100% for creating a universal retirement system separate from Social Security.
Only 41 percent of those age 65 and up are currently receiving employer-sponsored pensions. That means that roughly 41% of retirees have more than a moderate amount of disposable income (I love that term). They can be expensive, both for the employer and employee, and they are almost never offered for low-income jobs. The poor must continue to be poor in the twilight of their lives.
So who stands to benefit? Workers, especially those in the low-income bracket, would be encouraged to save, bringing them the investment benefits that only those with a larger income enjoy today, not to mention the comfort of knowing that more than a Social Security check waits for them on the other side of retirement. Businesses, both small and large, would be relieved of the financial burden of providing employer-sponsored pension plans. Social Security and Medicare would have much of the burden lifted off of them. It’s win-win-win in my book.
Of course, there would be many nuances that would need to be debated and ironed out. And there are those who are skeptical of government programs. To them I point out that the administrative cost of government-run Medicare is less than 2% of total cost compared to almost 30% at private healthcare companies.
There are a couple of very good articles written about this topic from the New York Times and The Center for American Progress. Thomas Friedman also gives a detailed analysis of the plan in his bestseller, The World is Flat. Give them a read, then tell your Congressperson that you support universal retirement accounts in addition to, not instead of, Social Security.
Share This
Add this to your favorites