Social Security - Reform

Social Security has become embedded as a Social Contract between the American People.

However, the System is now in a state of depletion that must be corrected.  It is a major issue affecting the future of the Federal Government’s Finances.  

Cogport posted about the current state of the Social Security System on February 2, 2025.

In Review, here is a Summary:

O   Since 2010, Social Security pays out more in Benefits than it collects in Revenue.

O   The SS Trust Fund is depleting at a rate that will empty the account by 2035.

O   Today, there are less than Three Workers paying tax to support One Beneficiary.

O   See the details in the February 2 Post on this website.

The current Social Security System cannot continue without a Major Reform.

The Major Premise of any Reform must be No Reduction in Benefits to current qualified participants.

How can we accomplish a major overhaul and make Social Security a viable system ?

The Big Issue:  How to create a System that considers the funds already paid by current Workers not yet qualified for Retirement and provide a Fair Return to them for Retirement.

Create Government approved 401K Retirement Plans for future Retirees.

Use the current Trust Fund of $ 2.8 Trillion to establish initial funding for every Worker who has paid Social Security Taxes according to their contribution.

Government approved plans will be used to Fund investments in a combination of Bonds, Stocks, and Real Estate as a Traditional Company Pensions Plan.

Steps in the Process of Reform:

First, scrub the current system of Waste and Fraud.

Grow the Economy – More Employment means more Funds coming into the System. (Increase the Ratio of Workers to Beneficiaries).

Reform the System to provide Plans that are Permanently Funded and receive an Income that will grow the Balance of an Individual Account, and provide a Retirement Income better than the current Social Security program.

Under a New Plan, Social Security Payroll Taxes will be collected and funneled to Retirement Plans that are approved by the Federal Government as eligible based on Retirement Goals and financial integrity. Participants will have the option to choose the Investment Plans they prefer for government deposit of Funds collected.

The Investment Capital from new Individual Plans will also bolster the U.S. Economy with even greater Growth.  A great way to build a higher standard of living for all Citizens.

Of course, the details of timing and phase-in periods get complicated.  But not that complicated if we follow basic principles of investment and fairness. 

The alternative is Bankruptcy of the Social Security System.  Then, Benefits will be lost.

It takes leadership in the Executive and Legislative Branches to make this happen.

David Hollaender                                                   February 20, 2025

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