Saturday, February 26, 2005

Social Security - Part 1

I'm here to tell you...there is just so much Yada, Yada, Yada going on about Social Security reform. Let me see if I understand it. First, SS was created to protect old folks from being reduced to penury after their "productive" years. So, any changes must preserve that as its primary goal and end. Now, as I understand it, the problem with the current system is that sometime around 2020 the amount of money paid out of SS annually to retirees will exceed the amount being brought in. That is going to happen and there's nothing can change that. If we wish to preserve the system as is, there are three and ONLY three things you can do - 1. Raise taxes (which includes raising either rates, the cap on taxable income - or both) or 2. Reduce benefits (which includes reducing the rate of return or raising the age at which one can withdraw one's benefits - or both) or 3. Both reduce benefits and raise taxes. One of those three things will keep SS (as it is now) going for a good while. (end of part 1)


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