Social Security, A hybrid system
As it stands social security will be done as we know it around 2034, at which point the system will have to reduce benefits by 23% as it can to run a deficit by law. But we all know this, its just the facts of the situation and I do not Aim to replay the old ground. At the end of the day, we must do something to address the situation and support the program, there have been many solutions proposed to address the situation. Some want to go to a fully private solution, while others wish to keep it in the hands of the government. Both have their downfall, which made me think why don’t we move to a Hybrid system? In the hybrid system I am envisioning, the Social Security Tax would still be implemented. However instead of the government controlling one considerable sum of money, it would open High interest CD’s or savings Accounts for each individual within the banking system. Allowing access to the funds upon reaching retirement age. Now with a system like this it would have to have an overlap period, as people who already see benefits from Social Security should not see a disruption, likewise people entering the system such as Gen-X cannot see a disruption either. However, Millennials on down still have time to have accounts set up and reap the benefits of our individual contributions to our Self.
If set up as a traditional CD or Savings Account it would allow the banks to have excess funds to offer loans, however if we where to allow banks to barrow against it we would need to have stiff regulations with harsh penalties to keep them from doing to many shady things with the money.
I will be the first to admit I am not a numbers guy It has been a struggle being dyslexic and just keeping numbers in the right order can be difficult at times. So, someone smarter in the number department will have to be involved to see if this plan would be practical as a solution. With that being said from a high-level perspective this seems a very promising idea. Just from a personal perspective, I would prefer to have a tax forcing me to save for myself rather everyone, then not having anything when others need it in the future. Then when it is needed, we will have access to funds to use as we see fit. Whether it is paying bills or other debt, spending time traveling the world. The point is it is our money, we should be able to use it when and how we like. Using a hybrid system would allow the most freedom while covering my butt down the road.
