During the last Presidential State of the Union address, Bush made the comment that he would listen to anyone who had an idea about reforming Social Security. The President's beleaguered plan to privatize Social Security is already in place! Social Security was the plan, at its inception, to subsidize Americans in retirement. Social Security, never meant to be solely funded by the tax dollars, would become privatized after a given time. Unfortunately, seen as a great vote-buying tool by manipulation of benefits, privatization never happened. It has served its usefulness and is no longer a viable plan. This is why the President is trying to change the way Americans save for retirement. The system to privatize Social Security is already in place. It's called IRA's and 401K's. These existing private accounts are used by millions of Americans to save for their retirement. The government in turn provides tax incentives to these Americans as savings encouragement. What is needed is a plan to transition from a Social Security dependant population to a population that uses IRA's and 401K's to save for retirement. It's going to take a transition period of sacrifice on the part of American's who will never be able to get Social Security, but who must finance the transition. To start with, set a date, i.e. January 1, 2010. Anyone born there after will not be eligible for Social Security. Everyone born prior would be eligible for Social Security benefits. Younger persons could be encouraged to opt out of the system with tax incentive, but they would have to understand that they would be expected to continue to pay into Social Security system to finance the transition. Providing tax incentives to the parents of the newborns born after the "defederalization of social security date" by allowing the parents to start an IRA for their children, say up to $1000 a year per child. By the time the child is ready to enter the workforce, they will already have a sizable retirement savings plan started and will be better educated and adapted to the need to continue to save for their retirement. As the years go by, the population eligible for Social Security would diminish and at some point in the future the government could reduce the amount needed to support this social security dependant population until Social Security could be eliminated completely. Replaced by a private system that has be up and running for years by that time and totally in the hands and under control by private citizen.
What would make this transition work better and more smoothly would be to eliminate the income tax system, the hated IRS, and the 16th Amendment. Replace them all with a National Retail Sales Tax or "Fair Tax". The economy would be infused with a $2.5 trillion boost. With a turbo charged economy, the necessary funding to finance the transition from an over burdened federally funded Social Security would never become an issue for discussion. Not to mention the government would save almost $300 billion a year with the elimination of the IRS. The benefits of the Fair Tax Plan are so hyper dynamic; I believe that it has far-reaching benefits that have not been conceived yet. I have been a supporter of the Fair Tax for years. I have studied it extensively and it excites me to think of our country being free of the income tax stockades and the heavy handed IRS. The current bills before Congress are HR25 and S1493. They eliminate the income tax, IRS, and mandate the elimination of the 16th Amendment which created the income tax. Our founding fathers knew the forlorn evils of an income tax and made sure that our Constitution made no provision for one. The Constitution was illegally amended in 1913 by our wonderful Congress. We have been stolen blind ever sense.
I believe the current plan to privatize Social Security will be fought by opponents on both sides and eventually prevail. The plan I suggest gives us the time to plan for, and accept a new way of saving for retirement. There is no real need to "privatize" now. No one currently eligible for Social Security is left out in the cold and the period to transition is slow and gentle on the economy. There is no way to transition to a national privatized retirement plan without sacrifice on the part of everyone involved, but I think this plan makes it viable and palatable. I think it is a waste of the Presidents time to advance a privatization agenda because the Fair Tax would virtually fix most real problems with the governments budgets. I hope that Americans eventually see the benefits of this plan and not be so bull headed about accepting change for the betterment of ones self and their country. Ronald Reagan once said, "America is too great for small dreams." Independence from England was not met with great fan fair at first and look where that led us. For more information on the FairTax and impact on retirement, please go to www.fairtax.org and www.ntu.org.
