This Year Social Security Will Pay Out More Than It Takes In

With all the bad economic news comes another piece of bad economic news: Social Security will pay out more than it takes in this year.  Not a real big surprise, but bad news just the same.  The cause of this inequity, as per Treasury Secretary Tim Geithner, is the fact that many Baby Boomers are now retiring, and retirees in general are living longer.  If this trend continues, Social Security will be bankrupt and more revenue (HIGHER TAXES) will be needed to keep payments to retirees coming.  And the cycle will continue.

So far government response to the issue has been to raise the legal retirement age.  People in my age bracket (Born in 1960 or later) can retire with full benefits at age 67.  Ah, the golden years.  But I wonder how many people will be in shape to "retire" as the retirement age creeps higher and higher.  Will we reach the point that Octogenarians are still expected to be on the full-time work force?  The point is that now we are paying taxes to the Treasury Department, which then, in effect, hands the dollars from you and me to the person receiving retirement benefits.  There is no longer a "principal" sum in the bank gaining interest or being invested.

Now, I believe those who have paid into Social Security should receive that which they paid.  But I also believe that Social Security has seen its best years.  It was a well-intentioned experiment but it is simply not sustainable.  That is the easy part of the problem.  But how to exit this program and treat fairly all the people that are still paying in is the second part of the problem, whose solution is not simple at all.  Well, the easy way - not the fair way - IS easy, but would not win support with any sector of the population.  That solution would be to simply dissolve the Social Security system.

My solution would probably not pass muster either.  I do not believe myself that it would be "fair" but it would allow US to dismantle the failed Social Security system, and allow Americans to fund their own retirement, as they should have been doing in the first place.  I propose that no one be allowed to enroll in Social Security if they were born after 2005.  As the years go by, fewer and fewer people would be in the system, thus less and less funding would be needed.  Eventually everyone would be RESPONSIBLE for their own retirement planning. 

Now I can hear the screaming and yelling.  "The Government" must control Social Security or it will go broke!"  Oops, been there, done that. Can't afford the T-shirt.  "What about the people who don't plan for retirement?!!  What will happen to them?"  Good question.  What WILL happen to them?  I suggest to them they ACT LIKE ADULTS and PLAN FOR RETIREMENT.  That may sound harsh, but people are responsible for themselves.  Or they should be. I, for one, do not believe it is GOVERNMENT's responsibility to take care of functioning adults.  They KNOW they will be unable to work at some point.  "What if someone is disabled and can no longer work?  The GOVERNMENT MUST care for them!"  No again!  There are several insurance companies that sell very reasonably priced disability insurance.  And with no government agency needed to "administrate" this function, there is another area of savings.

I think I have presented a reasonable fix to the Social Security problem.  Eventually people will be responsible for their own retirement under my plan.  Isn't that what they were doing BEFORE Social Security came along?  By paying no Social Security taxes, people will have more money to actually give to charities, which means local dollars would stay local.  Charities would then have more money to meet the needs of those who chose not to plan for their retirement in their working years.  I know most people will not like this solution, but there it is.  Just more Desert Hot Air.