Social Security is in financial trouble. It may not be able to pay for the promised benefits. These benefits only pay a maximum of $17,000 per year and expire when you die. We can do better.
Here is my answer to reform social secutity while maintaining current benefits. Under my proposal you will get 100% pension and free medical insurance. The following is a proposed bill to be introduced to Congress. Please read and give me your comments.
Social Security Investment Trust Act of 2012
Social Security, Medicare, Workers’ Compensation, and Workers’ Unemployment Benefits are currently being paid for by taxes on workers, employers, self-employed persons, the Social Security trust fund and general funds. Benefits are increasingly becoming greater than the taxes collected, causing the government to borrow money to fund the deficit. Some nations in Europe and, in fact, the USA are having financial problems caused by this deficit.
This Act will divert all the taxes collected to a new Social Security Investment Trust Fund to be invested in American Business. Each worker will have a share of the Trust in proportion to his/her investment in it and will receive funds from his/her share for retirement, health care insurance, and unemployment. The tax collections will be unchanged. People who are retired will continue with the present plans unchanged. The Coinage Act of 2012 may be used to raise revenues to pay for the Social Security Investment Trust Act and should be viewed as part of this package.
The expected effect
Approximately one trillion dollars per year will be invested in American business, greatly improving the economy and income tax revenues. Investment Trust Fund benefits will gradually replace the current program benefits. It is expected that the budget will balance within seven years and benefits will be greatly increased. Most workers will retire millionaires, and these funds will be fully vested so that they may be part of the worker’s estate. Retirement benefits, medical care benefits, and unemployment benefits will be paid for by the worker’s account in the trust. The transition should be essentially complete within one generation.
The Social Security Investment Trust Act (herein after referred to as the TRUST) requires that all money deducted from employment salaries and all money provided by employers to Governments on behalf of their employees and all money provided by self-employment taxes (herein after referred to as the WORKERS) be invested in a new Social Security Investment Trust on behalf of each employee (herein after referred to as the FUNDS). INCOME TAXES are not part of this plan and will continue unchanged. The FUNDS will be the property of the WORKERS in proportion to their investment in the FUND, and each WORKER will have an account showing his/her shares in the TRUST and the value of his/her investment. WORKER’S benefits will be paid by the WORKER’S account in the TRUST.
The FUNDS will be invested in USA-based business and USA subsidiaries of foreign business to provide jobs and economic growth for US. No funds will be invested in government securities of any nation or infrastructure of any nation. Investment managers will be chosen from a national pool of professional wealth managers (herein after referred to as the MANAGERS) with no MANAGER having a greater share than TBD percent of the FUNDS. MANAGERS may not contribute to any political candidate’s campaign funds.
The FUNDS may be used for health insurance of workers, unemployment benefits of workers, and the workers’ retirement benefits. If benefit payments are less than current programs, all current programs will remain in effect as a minimum payment to workers with the current programs making up the shortage difference. The worker’s funds are his/hers and will be part to the worker’s estate if any remains.
END OF ACT
Q: How will this act affect current entitlement program benefits for Social Security, Medicare, and Unemployment?
A: Current program benefits will not be changed by this Act until the worker can pay for them from his/her account in the Trusts. The Worker will receive current benefits or better.
Q: Why the requirement not to invest in Government securities and infrastructure projects?
A: This has been greatly abused by current plans that loan the money to governments at low or no interest amounting to another tax. Politicians like to build infrastructure projects for political purposes that make little economic benefit.
Q: How will we pay for the current benefits if all the revenue goes into the Trust?
A: This program will improve the economy, creating more government revenues from other tax sources such as Income Tax. The budget is projected to be in balance in seven years. Also, the Coinage Act of 2012 may be used to help pay the current benefits.
Q: This sounds too good to be true. How do we know the investment projections will be achieved?
A: This bill shows the difference between the current pay-go welfare transfer payment programs which have no investment return and conservatively-managed investment programs. Albert Einstein called compound interest the eighth wonder of the world. The projections assume a real rate of return of only 5%. Over a 40-year period, the value of the investment increases by 300%. For example, workers making $50,000 for 40 years will contribute $245,000 which will grow to $1,000,000 at 5% which could be used to pay out $50,000 / year with no draw down and leave the $1,000,000 in the worker’s estate. Compare that to the current defined-benefit plan of Social Security which only pays $18,000 / year and ends at the worker’s death with no money for heirs.