Social Security

Well, it turns out that Bush was right that this was a problem, but it still hasn't been fixed. Barack Obama had the following to say:

"I think the best way to approach this is to adjust the cap on the payroll tax so that people like myself are paying a little bit more and people who are in need are protected," the Illinois senator said.

"That is the option that I will be pushing forward." Currently, only the first $97,500 of a person's annual income is taxed. That cap is scheduled to rise to $102,000 next year.

Obama's proposal could include a gap or "doughnut hole" to shield middle-income earners from higher payroll taxes, he said.

Uh huh, uh huh. WHAT?!! Now raising the cap on social security taxes makes sense, as Social Security would be better as a flat tax than a regressive tax as it currently is. What I want to know is when will Social Security honestly be declared not to be a pension system, but rather, just "welfare for old people?" Because that's what it is.

But the doughnut hole is basically a very open invitation for not just company cars, but company-provided housing, helicopters, etc. Sound silly? Well come on - this is the stuff tax accountants dream of.

Any other ideas?

On the Republican side, candidate Fred Thompson last week unveiled a Social Security proposal that calls for reducing benefits to future retirees and creating a system of voluntary personal retirement accounts. The plan is similar to one put forth by President Bush that ultimately stalled in Congress.

Gee, why does that sound familiar? Maybe Because George Bush already tried it and fell flat on his face. The government doesn't need to get involved with private accounts - because they're private. Private accounts already exist. This is as mind-boggling as the need to hire a scout to find out if Greg Maddux can pitch.

Privatizing Social Security is something that the US simply cannot do because it was put off far too long. To pull it off, it needs a more comfortable position, and the only way to get there is to raise the retirement age at an astounding rate.

Most importantly, the Minimum retirement age, which Bill Bradley has pointed out before, should be raised. Getting that up to 65 in the next decade and 70 by 2030 is not an unreasonable goal with the full retirement age rising along with it up to 70 and ultimately 75. After all, the program was created when the retirement age was 3 years in excess of life expectancy; it doesn't take a mathematician to figure out that if the retirement age slips to more than 10 years below life expectancy, then you have a problem. If you get the retirement age back up to life expectancy minus 3, you're in excellent shape.

At that point, Social Security stops being a source of income for a generation of people living off that and their savings for 20 years. Then you can talk privitization, because you'll reduce the impact it has on people's lives. Getting there would be harder, but it's a good start.