How to Reform Social Security

Congress decided at the end of the Johnson administration to include Social Security income into the General Fund so that LBJ could have a surplus for fiscal 1969.  It was only a few billion dollars.  But that mistake has cost this nation and its citizens trillions of dollars. 

One way to try and keep it solvent, if possible, is to index Social Security benefits for the years the recipients retired.  If someone retired in 1989, he would pay the same prices for things that he paid in 1989.  Everywhere that he paid for things there would be a device similar to what is used for credit cards that would allow his card to be passed through the scanner to adjust the prices of things.  The difference would be submitted to the Social Security Administration for either repayment or tax credits. 

Some larger companies may absorb the loss and pay the merchants to make up the shortfall.  Those companies may get tax credits to relieve the burden of making less in profit.  Instead of paying over $3 a gallon for gas, a senior might pay less than half the price for fuel.  Seniors would greatly benefit and be able to live off of a fixed income since he won’t need to worry about inflation eating away at his buying ability.  

FDR thought about privatizing a portion of Social Security and allow it to be invested by Wall Street, companies, and investment firms.  His advisors told him not to.  The private economy lost out on access to trillions of dollars that would have been better invested in companies that needed the money to succeed and produce huge profits.  

People would have the chance to invest some of the money or maybe most of the money privately to receive a better return.  If $20,000 of my money that has gone into the system had been invested wisely with companies that want to make profit with my money, I might have twice or three times more money.  Even if the system doesn’t exist when I retire, I would still have retirement income coming from the investments made privately.  

People should be able to have money owed to them in the system loaned to them.  Since it is supposed to be their money, they should have access to their money.  I might take out that $20,000 and invest it in a commodity that will return $40,000.  I would be expected to repay the loan with interest.  It might be no more than 3% per year to make repayment easier.  The Social Security Administration would gain more money and I would gain more money than what Social Security will provide.