personal accounts and the nature of the remaining social security system. In a number of proposals being discussed on Capitol Hill, personal accounts would be funded with only 2% of earnings
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Lets move 2% from OASI into private accounts. What happens to the current cash flow? I ran the numbers and have posted them at
I would believe benefit cuts would be in order. Howe large? It would take a cut of 52.7323% starting in 2025. Of course if this phased in over time, the cut would have to be larger.
How does this pay the $10 Trillion unfunded liability?
I truly believe raising the ROR is the wrong direction. It is not the ROR that is too low. It is not the slight increase in life expectancy past 65 that has occurred. It is not a decrease in babies being born. It is not too low of a FICA tax being paid currently. It is nothing more than an unfunded liability caused by previous generations not paying enough OASI tax.
Had they paid the beginning rate of 13.3% as required, we would not be having this discussion today. Social Security would have never been passed. Treating a symptom does nothing for the problem Just look at the shear magnitude of the unfunded liability and try to figure out how to fund this between now and 2015 when the cash flow goes negative!
Cut benefits by 75% now!!!
Means test now based on poverty!!!
Cut the OASI tax to 3% now!!!
Phase Social Secuirty out and fund a means tested safety net with 3/4 to 1% payroll or some other tax.
