I have evaluated several different proposals for reforming social security. The links are identified below.
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Myths: The Political Tool of Choice
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A discussion of the most common 24 myths surrounding Social Security with links to government web sites.
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Social Security: What Went Wrong?
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A presentation on social security. What was promised, who was covered, what changes were made and what was known by politicians since 1935.
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What affect does increased life expectancy have on Social Security?
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A discussion on how life expectancy has changed since 1900. Includes links to period life tables for male, female and both combined. Is increased life expectancy a significant problem for social security?
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The Worker to Beneficiary Ratio
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Identifies the worker to retiree ratio as well as the worker to beneficary ratio. What is the difference and what was known?
Robert Ball Plan for Social Security June 2005
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The Theoretical Old Age Tax Required to pay scheduled benefits
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The Social Security Old Age Survivors Insurance (OASI) has a flat tax applied to wages up to a set amount. This tax was initially 2% in 1937 and currently is 10.6%. What is the theoratical "old age" tax needed to pay scheduled benefits?
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What Happens if All Wages Were Subjected to the Social Security Tax?
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Many have suggested eliminating the wage base cap from social security? If this is done, what affect would it have on Social Security revenues?
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What happens if all income were to be subjected to the Social Security Tax?
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Some have suggested subjecting all income to the social security tax. This would include interest, dividends, capital gains, royalties, etc. What impact on social security would this change have?
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Are You a Donor?
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Some states send more tax dollars to Washington than they receive. These states are some times referred to as "donor states." Workers could also be categorized as "donors" if they will contribute more to social security than they can expect to receive. Are you a donor?
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Reducing Cost of Living Allowance
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Some have suggested reducing how Cost of Living Allowance (COLA) is calculated as a way to save Social Security. Is this a benefit cut and if so, what equivalent percentage would it be?
The Social Security Act governing COLA's is 42 USC 415 (2)(A)(i). What most people do not realize is that when the trust fund ratio to expenses fall below 32%, COLA is reduced by an amount necessary to maintain this 32% ratio. The SSA Wage and Benefit Statements sent each year prior to your birthday clearly states the trust fund is projected to be exhuasted in some identified year. In 2010, it was identified as 2036. An exhuasted trust fund means the ratio is 0% and no COLA will be paid.
42 USC 415 (5)(B)(v)
"except that if the Commissioner of Social Security determines in any case that the application (in accordance with subparagraph (C)) of the additional percentage as computed under the preceding provisions of this subparagraph would cause the OASDI fund ratio to fall below 32.0 percent in the calendar year immediately following such subsequent year, the Commissioner shall reduce such applicable additional percentage to the extent necessary to ensure that the OASDI fund ratio will remain at or above 32.0 percent through the end of such following year."
In reality, reducing COLA does absolutely nothing for Social Security. It is another red herring.
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The Larsen Plan For Social Security
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Many think social security is an earned benefit. What exactly do they mean? To me, this phrase is a righteous euphemism for making the more truthful statement: "We were snookered by this Social Security Ponzi scheme, and now we are going to snooker the next generation!"
If Social Security benefits have been "earned" who is obligated to pay benefits to those who "earned" them? Workers? On a regressive tax basis? Why? Why perpetuate a fraud upon the innocent? Who is responsible for bearing the burden of a fraud? The person defrauded? Or an innocent or unborn child? Social Security is not fair, never was fair and cannot be made fair.
Simply stated, there is no painless solution. With this said, I have put together a proposal that will allow us to extract ourselves, our children and grandchildren from this dreadful mess.
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What is the affect of increasing the retirement age?
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Increasing the retirement age will help social security pay scheduled benefits longer, but what is the equivalent tax increase or benefit cut to the worker who collects fewer years and pays more taxes?
How would you like to have great returns like these? If you were born after 1944, forget it!
Your rate of return on your Social Security Contributions
Wage Growth and its Effect
The Social Security Lottery
Who Does Social Security Benefit?
A great article by Frank Redmond, THE PRICE OF FREE CORN
Definition of Pyramid Scheme
The Ant and the Grasshopper
