Thursday, July 01, 2004
Social Security Thread
On Kerry, he wrote, “I've very much warmed to the idea of a Kerry Presidency, and may even vote for him.” This is not as isolated comment from a disgruntled Republican. I keep hearing more and more thinking Republicans mention that they will not be voting for Bush although many have not made the conclusion yet to vote for Kerry.
Really though... At some point in Bush’s case, incompetence has to be called for what it is.
The first step in saving Social Security is obviously returning the federal government to fiscal sanity. However, my friend did reach across the isle with two suggestions on Social Security that I thought were noteworthy. He mentioned he would like to see Kerry address the Social Security issue in this manner and he would be a strong Kerry supporter.
Beginning today, all social security surpluses generated each year (estimated at $300 billion) will no longer be loaned and spent to the government. We are going to need that money in 5 years to fund the program..., so let's invest it someplace safe... municipal and state bonds tied to educational and infrastructure projects, and perhaps even NATO governmental debt. Bottom line, our reserves will earn interest, and our money will be liquid, so we can actually draw on it when we need it. The single best thing we can do for SS is to safeguard its reserves from future spending ... and the second best thing is to put it to work and earn some real interest.
Next, we need to address the long-term viability, here, we will need a trade off, we'll probably need to impose a modest increase to the current 12.6% payroll tax, with all the extra being invested in government approved equity markets... of course, this will not occur until we initiate wide-spread corporate reform, from the SEC & FDIC. For those domestic based companies willing to guarantee that their books are clean, through added disclosure and moderated business practices, America is willing to marry a portion of its financial health with yours, for a 20-30 year investment. Not only will this provide a safe-haven for our money, and measurable returns, but it should buttress our companies resources and competitiveness, keep more jobs domestic, and provide a huge incentives for our companies to clean their books and ways.
Two interesting ideas, although I don’t think Kerry will have time in his first term to save Social Security long-term. There is just too much crap from this administration to clean up.
On my friend’s first suggestion, I could see bi-partisan agreement to take the current Social Security intake off budget and invest it in interest bearing infrastructure and educational projects as well as state and municipal bonds.
On his second suggestion, I’m all for increasing individual savings through an increase in the payroll taxes. For the middle and lower classes, we could offset it with lower income taxes. Right now, once an individual earns over $80k, Social Security is no longer taken out. We should not exempt the income at any level, although we should still keep the maximum payout the same. The savings rates in this country are dismal and if this helps, lets do it, provided it is invested correctly. Adapting my friend’s point, this money could be invested in US manufacturing companies who agree to keep the jobs in this country. Hence a good way to offer Kerry’s tax credit for businesses engaged in making this country stronger and our workers more secure.
Did you catch that the current intake of Social Security in one year is $300 billion? Hmm, W’s war is now at 130b plus. How is that for perspective?