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Diogenes said:Agreed in principle, except that I don't like the idea of the government investing in anything other than treaury notes. IMO it would be a disaster for the government to invest directly in the stock market.
I don't understand ... it is OK for individuals' future retirement security in private accounts to be invested in the stock market, but for the Govt SS to be invested in the stock market would be a disaster? Why the difference? I might agree with you ... but that is a strong argument why we should not have private accounts.
The main problem with SS is that the current benefit system is too expensive for what the people supporting it can reasonably afford. Several things can resolve the problem:Part of the problem with social security is how it is indexed. Should it be indexed to prices, or to wages? Wages are a function of worker productivity, which rises about one percentage point faster than prices, and are the way SS is indexed now. I've read that the coming crisis could be postponed for at least a generation, perhaps indefinitely, if SS was indexed to prices rather than wages. I don't know for sure whether that may be true, but it does sound reasonable to re-examine some of the fundamental assumptions of the entire system.
1. Make it means tested. Guys like Warren Buffet do not need to be on the Govt's dole.
2. Make the age of receipt older. When SS started most folks were dead by the time the benefits were scheduled to kick in. We all live longer and healthier lives.
3. Change the method of collecting revenue. Right now, the effective 12.4% SS tax completely stops at $90k of income. Remove that cap, and the rate could be lowered for everybody while still generating extra revenues to pay benefits.