Can the Democrats still stop Republicans from raising the retirement age on the youth?
Did the fading generation win enough to French and Greece us?
Best Answer - Chosen by Voters
My answer to a related question:
What's happening in France (and Greece and the U.S.) is an example of The Law of Unintended Consequences and of what happens when government strays from it's legitimate, core functions and tries to do things that should be left to individuals and private-industry. I'm sure that the creators of the various government retirement systems, like Social Security, had the very best of intentions when they did so---but they've set us up to fail.
Social Security and Medicare are underfunded, through the death of the last baby-boomer, by something like $48-trillion. (I've read different figures but this seems to be the most common). That's not the *total* cost of those two programs, that's just the amount of the short-fall. Just imagine, for a moment, that instead of creating SS in the 1930s and Medicare in 1960s, that instead the government had created the various IRAs, to include the medical IRA, and 401(k)-type retirement accounts. Accounts that, by the way, you could leave any remaining balance to your heirs. How would things be different?
For one thing two huge government-bureaucracies--and pending fiscal train-wrecks--wouldn't exist. Each individual would be able to plan their own retirement.
Government tends to create "one size fits all" solutions to problems. SS begins at 62 and Medicare at 65---regardless of your individual circumstances. Some people who manage their lives especially well (and/or have a dose of "good luck") are in a position to retire at, say, 55. And then there are people who just can't imagine not working. You've heard or read about them: in their eighties and still working because they *want* to. Still others *don't* manage their lives well, blowing their money on foolishness ("got a cigarette?"), and need to work to 70 or higher.
There is no one system that we could come up with that would gaurantee that there would be no "losers," that no one would wind up in poverty. So then the question becomes what system can we devise that provides the greatest good for the largest number of people *without* the *forced* redistribuion of wealth, to include transfer-payments, favored by the Left? (No one has a right to anything that involves taking it from one individual or group and giving it to another).
As a simple statement-of-fact American style capitalism has produced the most wealth and freedom for the largest number of people possible. If people and government could learn to live within their means we would be even wealthier, on average.
My plan for phasing out SS (from a related question):
1. Effective 01 January, 2011, everyone 55 and older would be fully-vested in the existing system.
2. For each year under 55 (on 01 JAN '11) a person's payroll-tax contribution to SS would decrease by 4% down to age 34. Their paid benefits would decrease by the exact same amount. Thus someone age 34 would only be paying 20% of what they currently are and when they started to collect benefits it would only be 20%. People age 33-and-below would pay *no* SS payroll tax and would receive no SS benefits.
3. The amounts that people can contribute to the various non-government retirement systems, like IRAs & 401(k)s, would be increased based on the formula cited above.
4. Did you know that if someone ruins their health by smoking and substance-abuse they can qualify for SS disability benefits? I had two uncles who were hard-core alcoholic chain-smokers who ruined their health and got on SS because of it. That and some other blatant abuses/loopholes would be done away with.
5. Effective 01 JAN '11 receipts from payroll-taxes would decrease immediately and dramatically (but benefits paid out would continue to increase for years). How to make up the short-fall? SS begins to cash in its IOUs and at the same time we establish a floor under the price of gasoline at $3.50 a gallon, indexed to inflation. The revenue from this gasoline-tax could help fund any short-fall and would have the added benefit of encouraging energy-saving & pollution-reducing behaviors like buying more fuel-efficient vehicles and not exceeding the speed-limit. It would have the potential to improve the trade-deficit as well. Some kind of tax-credit for the poor, of course.
The plan described above involves some "pain" but so does the existing system and any other fix that might be applied. The numbers that I've used could be tweaked/massaged.
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