Yesterday I talked about simple solutions to Americas problems. Hermit shrewdly noted that my ideas were fine and good but did not address the complicated issue of entitlements. Entitlements are such a bit part of our nations financial problems that they can not be left as they are. At the same time there is a reason entitlements are referred to as the third rail of politics. If you life on a farm in Idaho and have never left it that would be the middle rail which is electrified and gives the trains power. To put it simply, if a politician touches it they are dead.
Today I will talk about Social Security. I talked about SS in the past when in a fairly heartless and extreme mood. This time I am taking a more thoughtful and realistic approach. Maybe the ideas I have will not completely solve the problem but they surely would not make it worse. Unfortunately nothing worthwhile in life is free.
I think the best course of action is to look at our SS problems from both sides. Simply put we need to figure out how to make SS take in more money and give out less. We are not trying to make a profit as a business would but if the incoming money doesn't equal the outgoing money the system will not work long term.
As for getting SS to take more money in I can only see one answer. The amount of money deducted from most of our paychecks is going to have to be increased. If anyone has another idea for the program to bring more money in I would be very interested in hearing it. This increase would need to be enough to be useful but not so much that young people flee wholesale to the underground economy or rioting. Maybe some wackos start burning down old folks homes to lower the SS burden.
The best way to sell this to my generation is to convince us that this will make SS solvent. Knowing I will actually get some of the money I put into SS back later on will make me a little bit less pissed off.
When it comes to money going out that is probably more touchy. It would take a whole lot for young people to start rioting over increases in their SS garnishment (I refuse to call it a contribution since it is forcibly taken from us). People old enough to be collecting SS are much more politically active and they have lots of time on their hands. They have the time to do more to support or hurt political candidates then any other group. If I was a politician I would rather have a leaked tape of me kicking a puppy to death then piss off the AARP. That was half a joke. If the old folks saw their checks go down 10 dollars a month they would call their Congressmen 5 times a day and their Senators several times each. They would write letters to the editor and raise all sorts of hell. We might even see the slowest most lethargic riots ever. The good news is that the riots would be over by 4:00 so they could get the senior special at their favorite restaurant and be home for Wheel of Fortune. Also note that those who are within sight of retirement are also a key voting block. They are young enough that some of them could actually do some damage in a riot. On a tangent if (though very unlikely) radical changes in SS payouts are going to happen I am going to go get a few gallons of Whiskey and a few gallons of Vodka because rumor is liquor stores in the deep south might start getting burned down.
I can see a couple ways to decrease the amount of money we give out for Social Security. We could make people wait another year or two to receive benefits. We could decrease the dollar amount of payouts. We could set a maximum income and asset level at which people are not eligible to drawing SS. I suggest that we do all three of these things.
Selling any sort of reduction in benefits to seniors would be tricky. If convinced the SS system is fundamentally flawed and doomed to immanent failure getting 15% less each month might sound reasonable when the alternative is getting nothing or serious inflation. These folks are old enough to know what high inflation does because they have seen it in the past.
IMHO the darkest and most likely scenario is to do neither of these things and just print more money. The old folks will keep getting checks for the same dollar amount but it will be worth less, like always there will be a significant difference between real inflation and official inflation which their COLA is based upon. Serious inflation would of course hit those on fixed incomes the hardest. This is the worst scenario because it would hurt EVERYONE hard not just those relying on SS.
Of course not letting congress raid SS funds ever for any reason would probably help also.
I think the best conclusion is that we all grin and bear it a little instead of completely screwing the young or the old.
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