FRED THOMPSON ON SOCIAL SECURITY
MINIMUM WAGE MILLIONAIRE
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- rightwinginsider2
- I dream of living in a strict-construction, minimalist-government, constitutional republic where personal liberty and private property are sacrosanct and in which the state is the servant of the individual citizen, not the self-serving drover of the dumb, collective herd. My personal observation: Washington lauds the glib, the cunning, the calculating, the shrewd, the slick, the sly, the clever and the crafty.
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7 comments:
Okay...I read it earlier and I just re-read it now, and I don't see how the Thompson plan does NOT make me worse off.
My future "retirement" benefits will be cut - do we agree?
Since I do not expect to be able to afford contributing to a PRA - I earn minimum wage, remember? - the PRA provision will do me absolutely no good.
Taking money out of my right pocket and putting nothing in my left pocket makes me worse off.
The whole premise of PRA's is instead of giving your FICA to government, YOU get it to put in a personal account that YOU own and can pass to your heirs upon your death.
Also, with a PRA you get a BETTER return. Instead of the paltry .5 percent you get from Uncle Sam, you can get a 5% or more in a PRA.
I corrected the link for Minimum Wage Millionaire
Ah, okay, now we're talking. It wasn't clear to me that the 2% is contained within your FICA contribution _ I was thinking it was a contribution in addition to the FICA taxes extracted from your wages.
Now this is interesting, and individuals will have to make calculations and take calculated risks, since retirement benefits are delayed for PRA participants.
But I suspect this may turn out to be just as regressive as the other proposals to "fix" Social Security, since the working poor have shorter lifespans on average than the middle class and rich.
Also, since the working poor have low marriage rates (men who cannot earn enough to support a family don't get married - ever read Wealth and Poverty?), they also have fewer survivors to reap their PRA when they die prematurely.
If you're going to die at 65 without survivors, you need the money NOW rather than after you're dead.
". . . working poor have shorter lifespans . . .they also have fewer survivors to reap their PRA when they die prematurely."
PRA's will neither extend lifespans nor spontaneously generate a family, but, neither does Social Security.
With Social Security, Uncle Sam's cold, dead hand reaches into your casket and takes your money for himself.
At least with a PRA, you can desiginate a cousin, neice, nephew, uncle or anyone else to receive your money because it is YOUR money.
The Supreme Court said years ago that you have no right to Social Security. It is not your money. It is tax revenue and the government can do virtually whatever it wants with the money.
Now that I've more fully digested the plan, I gotta say, this plan is GOOD.
Some nice safety valves that will help people avoid getting hosed.
For example, I see the "PRA contributor" benefit delay/reduction gives the worker a valuable option: if you expect to live to a ripe old age, delaying the benefit a month or two is the better deal, and if you think you're going to die around 68, you can choose the benefit reduction (1% per month, or half that) which is the better deal for you.
While this is very good for the worker, it does present something similar to a moral hazard for the system which might lead to some tweaking of the program.
Also, for those low earners who need the money for present consumption, they have the option of taking money out of their PRA after 62. That's also a valuable option to have.
If this is actuarily sound - and if it were unsound, the usual suspects would have bashed it - it looks like a pretty clever solution.
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