Don't touch Social Security if you want to get elected. Whether we're listening to Senator McCain's promise to leave everything alone, or Senator Obama's promise to raise the payroll tax on the rich (after he's out of office), the message is clear: when you're talking about "change," you don't mean anything that might affect you, just the other guy. The McCain, Obama, Social Security Tax dialogue — "MOSST" — seems geared toward reassuring the public that everything is basically sound, and a few tweaks or even leaving things alone will solve all problems.
Despite all the reassurances, however, Social Security is going down the tubes. Whether you take Warren Buffett's $56 trillion projected deficit or the GAO's $74 trillion (which includes Medicare, accounting for the difference), something is seriously amiss with a system in which two-thirds of the entire federal budget is taken up with entitlements - the vast bulk of which are funded by a tax that falls most heavily on the people being taxed for a program intended to support them. In other words, the lower income brackets are taxed to support the people in the lower income brackets . . . the assistance being made necessary by the fact that approximately 15% of their income (7.5% on wages, 7.5% on the cost of consumer goods resulting from employers passing through the tax to the consumer) goes to the federal government to be distributed back to them, after deductions for running the system.
Frankly, nothing is going to get fixed until and unless people wake up and realize that, far from being a healthy sacred cow, Social Security is a very sick puppy. Our retirement security is not a political football, but an issue that needs to be addressed now, while we still have the chance. A good place to start is with CESJ's "Capital Homesteading" proposal, designed to run parallel to the current Social Security system until it has the income-generating capacity to replace Social Security, except in cases in which there is demonstrated need.
Capital homesteading has the potential to vest every newborn citizen with direct ownership of an asset accumulation that would be worth approximately $500,000 by age 65, with the capacity to generate $50,000 a year in after-tax consumption income, an estimated total of $1.6 million in gross income from Capital Homesteading alone from birth to age 65. This is far in excess of anything that Social Security can promise or (more importantly), deliver.
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