What does your plan do? It does nothing either. Why do I say this? First I do not think any politician truly understands Social Security, mathematics nor economics, otherwise you would not even be thinking about economic growth as a way to save it. Second, The OASI benefit formula is a divergent Series. It is impossible for the revenue side to converge with the expense side. The mathematical proof can be found at
Your plan does nothing about the problem because regardless if the money is in the OASI fund or private fund, the average ROR till 2078 to make the plan solvent is over 15% a year till 2078. I just do not think it is possible. On top of this you are allowing those to keep the excess where as the analysis assumes it is evenly distributed. How do you plan to generate over $700 billion a year with a lousy 2% savings when the 10.3% OASI tax raises less than $400 billion a year? I understand compounding, but what you want is similar to what we in the nuclear industry call a "cold water accident" where you get instaneous reactivity in a core "melt down time."
Second, the unfunded liability if we just end the program today and pay all acrued benefits stands at $10.712 Trillion. The analysis can be found at
Third, even if we did not go "Cold Turkey" with social security, we still have a problem. The unfunded liability by age is easily calculated. You can reat all sorts of anlysis on phasing out, cutting benefits, raising taxes, increasing the age etc in table format for all ages at
As one can easily see, the sum total of all OASI revenues before even one penny is sent to retirees is less than the growth in the unfunded liability. In other words, even though you think you have a $100 billion surplus, you really need $700 Billion just to stay even with the unfunded liability. Next year the unfunded liability will grow from $10 Trillion to $10.7 Trillion. By the year 2044 it will be over $60 Trillion.
If you do not even look at cutting current benefits now, you will never come close to solving this mess.
Check out this plan. It will work. Do you have the courage to even look at it?
The main point to make here is, it is very clear those retiring early before 1994 broke even so to speak. Those retiring with full benefits broke even in 1991.
As one can see, retiring early is the best case for payback. However, when one takes into account a non-working spousal benefit, we see that those retiring today still get back more than what was paid. This is the crux of the problem. If those who paid the maximum are getting back more than they paid in, it is very clear benefits paid to lower wage retirees are getting an even larger pay back. This pay back can be up to six times or more than what their OASI contributions would have paid.
Therefore, a fairer method would have those within the same age group share their contributions. This would mean they all take the same percentage benefit cut (~80%) or those at the top take a much larger cut while those at the bottom take a smaller cut or no cut. In any case it is unfair to make the next generation of workers pay extra taxes to make up the difference.
In my opinion and those of my five children, do not save it for me and they ask me to tell you not to save if for them. They do not want it!!!
