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Reply #19: Social Security is welfare in part [View All]

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exboyfil Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-05-11 08:58 AM
Response to Reply #15
19. Social Security is welfare in part
Because of the formula used to calculate benefits. I can give you a much saner approach to this situation -

1. Eliminate the cap on wage income (ideally I would make it all income but at least start here).
2. For those making over the current maximun allocation reduce their S.S. withholdings for that amount of income by 2%/2%. Continue with the current benefits formula that does not recognize income above this level.
3. Reduce the withholding level for everyone currently so that we have a pay as you go system for now (in other words do not spend the interest which is currently happening). This should have the same net effect on the economy as what is being proposed except the burden is absorbed by the higher earners.
4. When the economy gets better, draw down the Social Security Trust Fund by not increasing withholdings.
5. Pass an iron clad law that withholdings will never be more than 7.5%/7.5%.
6. Bring all exempt high earners into the Social Security system (such as California teachers etc). For simplicity just make it new workers.
7. Going forward if revenues do not sustain a pay as you go at 7.5%/7.5%, reduce the benefits after a certain fixed amount is paid out (for example $10K).

Currently high earners get to skate upon their obligation to support lower earners. Those folks in about the $50-$105K range subsidize the program for those who make less than that. It is not fair. Obama should be going out with the math to show folks how it is not fair.
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