Sunday, February 21, 2010

the cost of growing old.....

In 1935, a great idea grew out of the Great Depression....Social Security. What an idea! In a bet that Las Vegas would appreciate, people who lived past 65 would receive a monthly check to help defray living expenses until death. But, statistically, death would occur at 62.

In the 75 years since its inception, Social Security has gone on to become the insurer of all, the ultimate safety net, the protector against poverty in old age. It's had several revisions, each time adding a little weight and cost.

In those 75 years, we've managed to live longer, a lot longer. What used to be a sure bet at cost containment has turned into a sucker's bet of cost

Like loading up a backpack, the load of Social Security has become too heavy to carry. It's slowing down the economy to a crawl. It's killing us.

I have a plan. It involves three elements and it will require sort of a Chapter 11 of social services. We have to reorganize the way we think.

The first part of the plan is to index the start of Social Security to our expected death, because the commitment is to the length of time to our death, not from our birth. If the index is to years of our statistically timed death, to some degree, we can control the cost of taking care of our elderly.

This will require workers to work longer, probably until the age of 70 today. The impact of these workers staying in the workforce, paying taxes and not drawing on Social Security would be approximately $300 billion.

The second element of this plan would be to recognize that any product imported and paid for with American dollars should have some responsibility to our social safety net. Last year, we imported over $1.6 trillion worth of goods, or about 11% of our gross domestic product. Suppose we place a tariff of 16% (employer plus employee portion of Social Security) against those goods to cover the Social Security portion of our economy. This would net $250 billion to our economy.

Finally, we need to stop tying years of public employment service to retirement benefits. Teachers, postal workers or any public employee retiring at 55, with arguably 30 years of life expectancy in front of them, is not the kind of economic model that lends itself to a solution.

Public service has turned into a kind of work one year, get one free program. We just can't afford it anymore. Teachers and public employees need to work under the same rules as the rest of us, and they need to provide income to our economic engine.

So, there it is; my plan to save Social Security.


  1. as a former postal employee, let me contain my extreme rage for one minute....ok....I'm now slowly walking to the gun rack. Taking down the shotgun. That'll be me outside your door, in the bushes early in the morning. Messing with a postal worker's "entitlements" never plays out well.

  2. enjoyed your blog...keep it up. If time check mine....

    but only if interested.....i will continue to follow yours

  3. Enjoyed your blog on the Social Security System. I am part of the problem I am afraid. At age 57, my kidneys finally gave out forcing me into dialysis.

    In order to hopefully get back into the workforce I began college again to secure 21st Century tools to compete in the workforce. As you may or may not know, the older you get; without specific tools, the jobs you can get are not easy on the legs and feet of an older person.

    I am not diabetic nor do I have high blood pressure. The only thing I feel but can't prove it ... is being misdiagnosed bipolar in the 80's and placed on Lithium. My technical diagnosis is "unknown etiology". After entering the 3rd year, I finally forced the doctor to take me off of the medication safely. Didn't have any insurance for quite a while so therefore, didn't find out until 2003 of my end stage renal disease. Diet alone I kept off of dialysis for 4 years.

    I don't know how long social security will last me or if I will die first. If it runs out prior to my death, that is why I am going to school to get some 21st century tools so that I can make supplemental income.

    I have just begun a blog ... as my life as a free spirit; but beginning with my childhood.

    Lately people have wondered how I could be so optimistic and my blog will tell my story of how it began. I have just begun this night.

    Will enjoy following you.

  4. With respect to Social Security pensions, we too have a similar problem here in Canada. With the massive economic meltdown it is also time for our GovernmentS to change their method in thinking.

    In my opnion two of the biggest woes that plaque our system is the entitlement mentality of Public Servants .... and their Unions. (For example: Federal 'retirement pensions' alone cost this Government (we the taxpayer many of whom are in the private sector, $58 Billion a year.) Secondly it is those who hold Canadian Citizenships who have returned to their homeland; renew their full-time residence in a foreign country and receive Social Security benefits without penalty .... yet do not contribute to the current economics of our country en masse.

    Super post Tom and I agree with everything you said. -Brenda-

  5. Thank you for your comments. This is a big problem and I think it's time our leaders understand we will help, if they let us. Stop overpromising and start working. We will do the same.