So, after I've identified the problem, I feel as though I should at least present a plausible solution. Not that my solution should be THE solution, but maybe it will begin a conversation about the effectiveness of different policies toward reaching our goal of not only bringing down the deficit but also fostering sustainable (operative word) economic growth. And please don't think of me as a policy expert. I've studied social and economic policy, but the Ph.D. and a lifetime of experience are conspicuously absent from my resume, so I can't be starting from a much better position than anyone else reading this blog. But I hope you aren't looking to me for answers anyway... at least not exclusively. I hope you are looking to me and that guy, and that elderly lady over there, not to mention her 20-something grandson who is just beginning to make his way through this crazy world. We all have something to contribute, and the combination of our genuine efforts at working with each other toward a common goal cannot help but be greater than the sum of their individual parts. That's what democracy is all about; keep that in mind.
What should be done? I think the Deficit Commission report was a good start, but something has to come out of it, and it has to begin with the big boys: Medicare, Medicaid, and especially Social Security. There have been many suggestions for better efficiency with these programs, and all of them should be looked at. In the case of Social Security, age of eligibility changes should be looked at and, ultimately, enacted. 65 was a good age when the program began. Now it is a significant drain on the fund and should be increased to a graduated rate between 67 and 70 (25% benefit at 67, 50% at 68, 75% at 69, and full at 70). This will help to keep the fund from depleting as quickly as it is expected to. Also, a person's benefit should be tied to how much the person (or beneficiary) paid into the fund. For retirees who are in danger of running out of benefits, a separate safety net insurance fund will be set up, collected from a small companion tax that will be collected along with the Social Security tax from every worker. For example, a person's benefit would be determined by a 4% tax on wages, and an extra 1% will be collected as a broader safety net fund for those who outlive their benefits. Finally, a significant tax benefit should be set up for any retiree who denies the Social Security benefit. If you are well-off enough that you don't need the benefit and you have enough integrity to voluntarily give it up for the good of the system, you should be compensated in some significant way. A large tax break on your estate or other assets would be appropriate.
I'm not too familiar with the arguments for privatizing Social Security. I can imagine that it would be just like a 401(k) in the way that it would be a voluntary contribution rather than a mandatory tax. I don't see this as being a very sustainable solution. Except in times of economic pressure, we as a nation are not very good at saving money. A private retirement fund is no different. I can imagine that the structure that I proposed in the previous paragraph would be more conducive to a privatization than the way we currently do it, but I can't really imagine it having anywhere near the broad social benefit that it does now.
Well, it's obvious that this little experimental conversation starter of mine will end up taking several posts. I'm not about to overwhelm you (and myself) by trying to put all of my ideas here. We'll start with Social Security and move on to other policies soon. Now it's your turn to tell me what you think. Please take these as suggestions and not dictatorial decrees. Please give reasons why these policies would be beneficial and why they would be detrimental. Please stay away from cliches. And most of all, please be civil. I'll consider deleting any comment that doesn't follow these rules. Thanks.
Okay... give me your thoughts.
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Ok, let's start with social security. I don't know why a large majority of the public believe that S.S. is a burden to the gov't. but it isn't. It does'nt effect the deficit one iota. Is it in trouble? Yes it is, and some of your suggestions should be argued out and considered. But changing anything that has to do with S.S. will not cut the deficit.
Medicare is the same thing. Sure it is running out of money, like S.S. but it is totally financed by employer/employee input, like S.S., and the govm't. has nothing to do with it. Medicade is a different story. It is subsidised.
Although, now that the present administration has given a reduction in social security taxes, to stimulate the economy, and will make up the difference later, they will start to become a responsible party. Now S.S. (will) become part of the national debt. I don't know who's idea that was, but they ought to be strung up and tossed out of office, because now the govm't. will be on the hook and they will have more control over what decissions are made. It's a sad day when these sort of events happen and the public has no say. And the really sad part is that both parties let it happen.
Can there be a remedy to the present fiscal problems? There may be. But, I'm affraid the wrong solutions will be researched and enacted way before the right ones are ever discussed. Sorry!
Big Daddy.
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