"Because in Cyberspace, no one can hear you scream."
Saturday, January 22, 2005
[Media Source*] ...of Social Security reform, the more I like it. See source link above. More below.
At the same time, most of the current payroll tax would continue to fund traditional social security benefits to current retirees. This reform would strengthen opportunities to build wealth for millions of Americans, many of whom have few financial assets today.
Personal accounts also offer a surer way to prefund our obligation to pay future social security benefits. While lawmakers find it difficult to ‘save’ rather than spend social security surpluses (the excess of current payroll tax over current benefits), personal accounts would be off-limits to politicians.
Can somebody say Selah?
I like how the Economic Times goes further into this issue, removing some objections to Social Security reform.
To start, what are the objectives of social security reform? One obvious objective is to advance the President’s ownership society agenda. The transition costs to personal accounts will actually put social security on a firmer footing.
As long as future net obligations are reduced by prefunding social security benefits through personal accounts, the diversion of a portion of payroll taxes to personal accounts is akin to prepaying part of a mortgage.
Some critics argue that personal accounts would expose workers to too much risk, and administrative costs would fritter away account balances. But personal accounts could be invested in a mix of inflation-indexed Treasury bonds and broad stock portfolios to keep risk low over the long run. If investment choices are limited to bond and stock-index funds, administrative costs will be very low. The government could pay for such costs in the beginning.
I think I am seeing some good ideas on how Social Security can be reformed for the best interests of all. Whether you love him or hate him, the President is addressing a current issue and is attempting to provide viable solutions towards them. This is especially good since it gives me another reason not to leave the system. Selah!
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