Source:New America Foundation– with a paper on Social Security.
“The conventional wisdom about Social Security is profoundly misguided. According to today’s mistaken consensus, the U.S. as a society cannot afford to allocate the money to pay for the present level of Social Security benefits for retirees in future generations. The solution, it is widely argued, is to cut benefits – either directly by means-testing or indirectly by raising the retirement age or allowing inflation to erode their real value over time. In this narrative, tax-favored private savings vehicles like
401(k)s and IRAs should be expanded in order to compensate for the allegedly necessary cuts in Social Security.
This consensus is not only misconceived in its diagnosis but also mistaken in its prescriptions and potentially disastrous in its consequences. Retirement security is often thought of as three-legged“stool” consisting of Social Security, employer retirement plans, and private savings. Social Security has been far more stable and successful than the other two legs of the stool…
You can read the rest of Michael Lind’s paper at New America Foundation
What Michael Lind and his colleagues are talking about here is expanding Social Security to the point that it is no longer a retirement insurance system, which it is today so everyone has at least some retirement income. And turning it into a national pension system so people could just live off of Social Security in their retirement and no longer need a pension plan and perhaps not even a government pension plan if they worked for the government for a long period of time like in the military, Foreign Service, etc.
So I guess that would be the big government approach to fixing Social Security: instead of just reforming the program so it stays around to meet future retirees and doesn’t go bankrupt, you just expand the current system that’s facing future shortfalls and promise more taxpayer funded benefits.
Reforming Social Security as it now stands is fairly easy, but perhaps politically difficult and you could even be progressive in doing it. You wouldn’t even need to cut the benefits of the wealthy or people who have generous private pension plans:
You tax the benefits of people who don’t need that income and put that money back into the SS system.
Instead of having a flat 6% rate which is a steep payroll tax on Americans, you go from 3-12% and perhaps even expand the Earned Income Tax Credit for low-income Americans to cover retirement savings.
And raise the retirement age for wealthy, white-collar workers.
When it comes to economic policy and government reform, I’ve always as a Liberal preferred more freedom of choice for individuals, over more government control. (Call me an individualist, if you want too)
I prefer Social Security Plus over just expanding the current program and allowing for every working Americans including low-income workers to put some of their own money like 3-6% into their own private Social Security accounts, that would be matched by their employer or perhaps even the government, that would be tax free, just as long as they don’t spend any of that income before they’re eligible to retire.
Our system and economy has proven that once individuals have the tools and freedom to make their own decisions in life, they tend to do very well with that information and power. We don’t need big government running our lives for us.