The State of Social Security and the Ryan Plan

I stated early on, even before the official announcement was made, that I don’t believe Paul Ryan is the correct choice for Vice President.  My reasons were based less on specific policy and more on general ideology.  Mitt Romney needed someone to balance the ticket not someone sitting on the same side of the seesaw; a younger clone of himself.  There were a wide range of choices out there and they absolutely didn’t include Bachman and Palin.  But from a policy perspective, I don’t entirely disagree with Ryan’s view of social security.  Let’s start out by making one thing entirely clear.  Social Security is not an entitlement program.  Most taxpayers will never get out what they put in to it.  It’s actually a pretty rotten investment.  No one should expect more since the government administers it.  The problem is, so many Americans depend on social security only to realize it won’t support them in their old age.  It’s merely a supplement.  Did the Roosevelt administration have the best intentions when coming up with social security?  Yes, although it was highly controversial at the time.  But does it function as originally intended?  Not any more.  Social security is no longer solvent.  As people live longer and as the birth rate declines, there are simply not enough younger people funding social security and this trend will continue.  In response to this ongoing decline, Paul Ryan has proposed allowing a certain percentage of a person’s social security tax dollars to be invested privately, thereby increasing the rate of return.  Sounds like a pretty fair and rational idea.  The problem is, if the investments go south, you’re in even worse shape than if nothing was done.  The government should therefore restrict the private investment portion to safer investments with higher yields such as bonds or mutual funds, not unlike most 401k plans.  These investments are steadier long-term and don’t fluctuate as quickly with market trends.  But there must be some kind of meeting of the minds because in terms of real dollars, social security checks pay for less every year.  The very modest cost of living increases simply don’t account for soaring gas and food prices among all of the other basic necessities.  Social security has not exactly outlived its usefulness, but it does need to be brought in to the twenty-first century if it is to be viable long-term.  The Ryan plan may not be the answer but at least he is attempting to think outside the box.  The mentality of let’s do nothing out of fear, is what kills ingenuity.  So Kudos to Paul Ryan on this issue for at least attempting to make a difference.

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