Trump’s Unique Opportunity to Solve the Social Security Crisis
Annually, a think tank or an economist states that our Social Security funding will run dry by a certain year, unless we make stark changes. As such, Congress steals from other portions of the Federal budget to prop up the Social Security Administration.
Delaying the Inevitable
This approach to the dilemma is simply kicking the can down the road. Concurrently, no politician wants to make a move that will eternally anger voters. Yet, we know that when Franklin Roosevelt first launched the Social Security Administration, there were dozens of people in the workforce for every individual who was retiring. The ratio has fallen and now it's a little more than two workers supporting every retiree. In short, the situation is untenable.
Until now, no politician can introduce reform without risking his or her political career. National debt is $35 trillion and Social Security is the third rail of American politics. Paradoxically, age 62, in this day and age, is too early to begin paying people social security benefits: those who reach age 62 could live another 15 to 25 years or more.
So, how can we as a nation raise the age at which one first receives Social Security payments and do so in a fair manner? Donald Trump’s business wizards, Elon Musk and Vivek Ramaswamy could concoct a solution. First, determine at what age benefits should commence, perhaps 68 or 72. Regardless of what age is chosen, a relatively simple approach is available.
A Plan for the Ages
For those in the workforce at, perhaps, age 28 or younger, offer them, say, $3,000 right now if they will agree to delay their first social security payment until age 72 or so. For those 38 and younger offer them $5,000. For those 48 and younger, offer them $7,000. Acceptance of the plan would be totally voluntary: each taxpayer gets to choose.
Thus, induce as many tax payers as possible to agree to a later starting age by rewarding them in the present. The net present value of offering such rewards would be to the Federal government's financial advantage. If 50 million taxpayers buy in at average of $5k per person, that translates to $250 billion. Such payments would lower the overall monetary outlay, long-term, by a significant amount, while generating enthusiasm among those who have opted for this cash bonus.
Those who are close to retirement, perhaps age 59 to 62, would also be offered some type of significant incentive to delay the age at which they would first begin receiving benefits.
One can manipulate the figures, but the principle remains the same. By incentivizing people to voluntarily delay the age of initial benefits, the entire system can be revamped to not bankrupt the U.S. or anger voters on either side of the aisle. To the contrary, such a plan would contribute to a more sound national economic future as we go forward.
Handle With Care
Some will argue that the cash bonus offered to delay such initial payments for 30 to 50 years, will need to be handled delicately. True. The amount offered will have to be just enough to induce a majority of potential recipients of the value of collecting the cash now.
Others might argue that offering such instant bonuses will put a strain on our already over-stretched budget and add to our accumulating national debt. However, if those who are closest to the current age of first reception, age 62, can be induced in to delay the age at which they file for benefits, then the program’s administrators, bureaucrats throughout the federal government, and the American populace can all breath a sigh of relief. Those taxpayers who are near the current age of first reception will help to engender the economic slack that the program so fervently needs.
The younger cohorts, under 28, 38, and 48 will attain a vital psychological benefit: they will know that the program will be intact when it is time for them to retire. Surveys over the past several years have revealed that today's younger taxpayers are skeptical that the Social Security program will be in force when they reach advanced ages. With this new approach to the program, with its appropriate incentives, their fears can be allayed.
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