Social Security is going broke. It needs to be fixed, and quickly, or future benefits will be sharply reduced. That would be extremely unpopular among the high-voting population we affectionately call “Seasoned Citizens.” Currently, that population is about 61 million strong.
Congress created the Social Security System, and, unfortunately, only Congress can fix it. For decades, the easiest way to get a politician “unelected” is for him or her to even mention cutting Social Security.
How, then, can Social Security be reformed and sustained for future generations? Theoretically, it could be done, but getting a majority of Congressmen and Senators to agree on a solution is like herding cats. Only harder.
Many interested parties have proposed solutions to Social Security’s funding problem. In my opinion, any acceptable solution begins with raising the qualifying age for collecting benefits. Simply increasing the future benefits eligibility age to reflect rising life expectancies renders Social Security actuarily sound for some time. It works despite requiring no new taxes or benefits reductions, and it provides an important, though incomplete, “fix” to the System.
One of the more interesting suggestions is from the Association of Mature American Citizens (AMAC), a conservative group supporting Seasoned Citizens. AMAC would impose a benefits COLA (Cost of Living Increase) that varies with income levels. For beneficiaries with smaller monthly benefits, the annual increase would be a minimum of 3%, with a cap of 4%. The highest benefit recipients would have a COLA ranging between 0.5% and 1.5%. Full Retirement Age (FRA) would slowly increase from 67 to 70. Additionally, AMAC would create a voluntary add-on account called “Social Security Plus” that would be invested mostly in stocks.
It is significant that AMAC has not yet “priced out” their proposal. Somehow, Social Security must find a new source of revenue, at least until the large younger generation reaches working age. President Biden campaigned on raising taxes on high-earning Americans, but “the rich” can handle only so much, and they are already strained.
Remember that Federal General Revenues can only be enhanced through raising taxes, borrowing money, and/or printing fiat currency. (Fiat currency is money created with no residual store of value to back its worth.) We already see the inflationary effects of flooding the economy with fiat currency. Cooler heads must eventually prevail. It is time to step up. Congress, do your job.
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