Allow new parents to set up an IRA for their new babies using their income tax payments for a few years. A $10,000 investment could, after 60 years of compounding, be a substantial retirement fund. Others could also contribute to the maximum amount, grampa and grandma, or anyone could use part of their taxes.

Eventually eliminating the present system and the low level poverty. People who are assured of a safe retirement could use the rest of their lilfetime savings for other projects, school, business ventures which might enrich the entire world as money searches for new business to invest in. Risk taking and new business could find abundant funds (buyer beware) if most people continued to save.

$10,000 might sound like a lot but look at the actual contributions by lower level tax payers to the total tax payments and it does not look so bad.
-- augustr, Nov 14 2002

(?) baked (Child trust fund) http://www.ippr.org...dex.php?release=214
a slightly different twist, but pretty much job done [neilp, Oct 04 2004]

This would, at least, eliminate the situation where certain people work and pay taxes all their lives for little apparent return, while others laze around and claim SS benefits having made no contribution.
Why limit it to parents though? Why should I not be able to divert some of what I would have paid in income tax to a personal account which will fund my retirement pension? Currently, the government takes money from me and lots of other people, and gives it to me and lots of other people, but the proportions which are returned bear no relation to those which are given. I'm willing to take the chance that I could live on my part of the fund if it were all returned to me, knowing that I'll not be subsidizing people who have made no contribution.
-- angel, Nov 15 2002


the idea is to eliminate the SS as all us older folks die off. We are going to have to go to the income tax funds to pay for SS eventually but at least the kids will know that eventually the contributions will drop off and eventually end.
-- augustr, Nov 15 2002


Any type of Social[ist in]Security reform on here could probably be dismissed as WIBNI/magic. Not saying I don't favor such an idea, but there's big a problem you don't really address: for all the talk of the "Social Security Trust Fund", Social Security has NEVER EVER operated in the black, at least not when measured by the standards required of private investment firms.

FROM THE START, Social Security gave money to then-current retirees who had not put in a dime; to do this, it took money from then-current workers with the promise that they would be repaid. Since only a tiny fraction of the FICA taxes were invested (the rest were misappropriated to retirees who, as noted, had done nothing legitimately to earn that money) the system was from the get-go laden with a debt far in excess of its operating capital.

The way the government runs the books, it manages to keep this debt under the carpet. As long as the system is kept running, the government can continue revolving the debt while conveniently ignoring it. The debt will grow until it dwarfs everything else in the economy (it already dwarfs the official "national debt") but the debt cannot revolve forever. It must eventually either be repudiated or repaid. The government has the authority to do either, but politicians have the political will to do neither.

Worse, because this debt isn't officially acknowledged to exist, anyone who attempts to dismantle Social Security by paying off the debt will be told it's "too expensive", while anyone who attempts to repudiate the debt will be accused of "attacking Seniors". Never mind that the politicians who would seek such measures aren't the ones who created the mess--society is very much in "blame the messenger" mode and would view those seeking to clean up the mess as being responsible for the cost.

If you can come up with a solution to that last problem, then your other ideas might have merit. Unfortunately, I fear FDR's albatross will be with us until it destroys this country completely.
-- supercat, Nov 15 2002


//Interesting, as I understand it, our Social Security system is funded from current operating budgets. Benefits are scaled to fit within their portion of annual budgets.//

Any politician who attempts to reduce benefits to fit what can actually be supported by current payroll tax levels will be immediately attacked for 'robbing seniors'. It's much easier, politically, to hike the payroll tax (especially since half of the payroll tax is hidden from most workers). Of course, this just continues the debt spiral.

Actually, I must give FDR some credit for crafting his scheme: if workers had to pay the entire SS tax burden, they'd realize what a gyp it is; if they paid none of it, they wouldn't feel Uncle Sam owed them their money back, and might accept the dismantling of SS. By having them pay half, Uncle can give the illusion of offering something for nothing, while the debt spirals up to obscene levels.
-- supercat, May 28 2003



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