What is (or should be) Social Security?

[Al Abbott <al_abbott@csi.com>]

Right now Social Security is two things: 1) a tax and 2) a welfare
program. Current workers are taxed to pay current retirees.

We have no ownership in the money taken from our wages. Nor are we
saving money. With the projected demographics, the government will
never be able to collect enough taxes to pay future benefits. The
current unfunded liability is about $9 trillion and will be paid
only through taxes (unless the government sells off assets to fund
the liability).

There is only a bleak future, if any at all, to the current scheme.
It should be totally scrapped.

Participation in retirement savings should be optional. If a person
elects to participate, 100% of the contributions should be put
directly into privately owned personal retirement accounts similar
to IRAs and 401k and Keogh plans. These defined contribution plans
should be tied directly to the individual so that they are mobile
and not tied to specific employers.

The government should let any current worker who wishes to opt out
of the existing SS Plan. All new workers would only be eligible to
participate in a private retirement account in the amounts he
desires. The government should fund the existing liability and pay
current retirees (and those who opt to remain in that plan) the
promised benefits.

Paying for individual retirement is not a proper function of federal
or even state government. The government should provide (through
privately owned accounts) the means by which all workers may
accumulate real wealth for retirement or for an estate to pass on
to their heirs. This is especially critical for lower wage workers
who now find it extremely difficult to accumulate savings.