I would think that the SS alternative presented in Barron's might appeal to you. It's definitely a bird in the hand, which would mollify the, er, folks of your generation.
"Real retirement reform ought to build on the
existing 401(k) and IRA savings plans so
that Congress and President Bush could
create individual retirement investment
accounts for every American. The president's
personal accounts aren't really private;
they amount to a mutual fund held in trust
by the Social Security Administration.
The first thing to put in the private
accounts should be a special issue of
inflation-protected government bonds
representing the present value of all those
pseudo-promises of Social Security
retirement benefits. Reflecting the terms of
today's Social Security benefits, these
bonds would be good only for the life of the
person to whom they were issued. As with
Social Security retirement benefits, death
would cancel unredeemed bonds.
This would give Americans the good news that
the government's full faith and credit at
last stands behind their benefit promises,
as it should, and it would make visible the
enormous hidden liability for those
payments, so we could face up to our real
financial condition.
People who wish to rely on the government
for their benefits would do nothing at all;
the Treasury would redeem their bonds on the
monthly Social Security schedule. Those who
believe they could do better in the market
could sell some or all of their special
Treasuries and choose their own investments,
with or without the help of an investment
adviser. (To make a market for these unusual
contingent bonds, financial institutions
would have to pool them and slice the stream
of payments from them, just as Fannie Mae
and Freddie Mac do when they when they pool
mortgages and slice the stream of contingent
payments from them. In large numbers, deaths
are considerably easier to forecast than
mortgage repayments.)
After creating the universal retirement
accounts and stuffing Treasury bonds into
them, the Bush administration and Congress
could shut down the Social Security benefit
system. The 12.4% Social Security wage tax,
half levied on employees and the other half
on employers, would become a mandatory
deposit into each worker's individual
account. The tax has been disguised as a
pension contribution since Social Security
began; at last this would be true.
There would be a big hole left in the budget
to pay off all those bonds, but not a new
hole. This is a hole we have been digging
for decades and pretending not to see. To
fill it will require spending cuts and new
revenues from an overhaul of the tax system.
"
Message 21307134 |
