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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 78886  
Subject: Re: A fix for social security and medicare Date: 3/16/2007 12:08 AM
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<<Hi Goofy
I'm not proposing that the person save AFTER tax monies... I'm proposing that the govt take the monies that WOULD be paid to SS and income tax for a few years and put those monies into a nontaxable account, such as an IRA or 401k or some such. i.e. the person pays no SS or income tax... that money is put into an account for that person's future needs.

No, it will not save 20,000/year but it WILL save close to 2500/year and in 8 years that will add up to 20,000. This could serve as the nest egg needed for compound growth to mature into a sizeable retirement fund.

Goofyhoofy is convinced that Social Security and Medicare are as sound as a dollar, but perhaps that's the problem.

Goofyhoofy is depending on Gen X, Y and Z to be willing to continue to send their money in to Social Security even though a large portion of those generations don't expect the programs to be there for them.

That's an unrealistic expectation, in my view. Just as you suggest above, more young people are going to want THEIR tax money to be there for THEM. Democrats were able to sink Bush's private accounts plan this time, but it will be back. And if it's packaged as payments into people 401K plan, something people understand, it will probably have a lot more popularity.

Goofyhoofy casually dismisses any suggestion that Social Security and Medicare are financially unsound, when in fact they are utterly dependent on the willingness of younger people to send huge amounts of money to fund benefits for someone else, rather than to fund their own retirement.

While the left resists descriptions of Social Security as a Ponzi scheme, that's just what it resembles. And if young people get the chance to direct the money into savings plans that belong to them, this fallacy will result in the failure of these mostly unfunded programs.

Seattle Pioneer
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