The Conservative Cave
Current Events => Economics => Topic started by: Janice on April 16, 2011, 12:12:56 PM
-
(http://i51.tinypic.com/155l8he.jpg)
Galveston County: A Model for Social Security Reform (http://www.ncpa.org/pub/ba514)
Tuesday, April 26, 2005
The current debate over Social Security reform is reminiscent of the discussions that occurred in Galveston County, Texas, in 1980, when county workers were offered a retirement alternative to Social Security: At the time they reacted with keen interest and some knee-jerk fear of the unknown. But after 24 years, folks here can say unequivocally that when Galveston County pulled out of the Social Security system in 1981, we were on the road to providing our workers with a better deal than Franklin Roosevelt's New Deal. >>>
The initial Social Security Act permitted municipal governments to opt out of the system - a loophole that Congress closed in 1983. In 1981, employees of Galveston County, Texas, chose by a vote of 78 percent to 22 percent to leave Social Security for a private alternative. Brazoria and Matagorda counties soon followed, swelling the private plan to more than 5,000 participants today. In the private plan, contributions are similar to those for Social Security but returns are quite different. >>>
In Galveston, if the worker dies before retirement, the survivors receive not only the full survivorship but get generous accidental death benefits, too. Galveston County's disability benefit also pays more: 60 percent of an individual's salary, better than Social Security's.
MORE (http://www.ncpa.org/pub/ba514)
GOOGLE (http://www.google.com/search?q=texas+town+opts+out+of+ss&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a)
Im sure this has all been covered here before, but I thought it wouldnt hurt to bring it up again as Paul Ryans budget starts to come into focus against the current democrat socialist/ marxist demagoguery.
-
IMO one of the biggest problems with SS is that the folks administering it can't be trusted.
Another thing that most folks don't seem to know is that when SS was originally implemented in 1935 the average life expectancy in the US was 61.7 (all races/both sexes). The retirement age for full benefits was age 65.
So it seems the system was not originally intended to support large scale, long term pay outs.
We now have a growing retirement age group with a smaller work force (or so I have read/heard). The system is simply not sustainable.
Couple that with the fact that far too many folks save a lot less than they should during their working years...
Recipe for disaster.
-
The system was also not intended for political parties to raid for their personal projects and leave worthless IOUs.
-
Notice the chart above assumes a modest 5% return. In reality the returns were about 6.5-7%.