Three programs-Medicare, Medicaid, and Social Security- with interest payments account for half of total spending. While these levels of spending and debt are already harming job creation and growth, projections of future spending growth are nothing short of catastrophic, both economically and socially. These dire projections do not include the fiscal nightmare of Obamacare, with over $1 trillion in new taxes, multiple mandates, and a crushing price tag.
Preservation of the safety net of Social Security and Medicare must be a priority. This requires making difficult choices. That begins by ensuring that millionaire politicians and billionaire businessmen do not qualify for benefits. As Americans live longer, we must retire later with more accumulated assets. By making these modifications now, younger workers who may live into their 90’s as a norm, have time to adjust their savings for retirement. This is required for the system to remain solvent.
This also represents another way the government has failed to keep its promises. We should move now to allow younger workers to manage their own savings. For a younger worker, they can have their Social Security and Medicare funds be directed into a 401K type of account(s) that they can manage. Workers electing this option will not be eligible to draw benefits from the social security or Medicare system. The Employer matching funds will continue to go into the Social Security and Medicare systems to maintain their solvency.
Medicare, in particular, is the largest driver of future debt. Real and substantive healthcare reform will empower millions of seniors to control their personal healthcare decisions, unlike Obamacare that empowered bureaucrats to cut Medicare in ways that has denied care for the elderly and raised the cost of private healthcare insurance for millions of Americans.
Making Social Security an Option
Is Social Security a good retirement plan? Economics professor Antony Davies shows that Americans stand to earn significantly less and assume more risk with Social Security than other investment options. According to Davies, taxpayers would be better off both in terms of financial security and return on investment by investing their money privately. Social security is extremely expensive, soon to be insolvent, and doesn’t even offer taxpayers the most bang for their buck. For those reasons, Prof. Davies argues that it is time for the government to phase out Social Security. Davies’ solution: the government should honor its obligations to current retirees while giving Americans the freedom to invest their money as they see fit.