Liberals understand incremental change. Obamacare didn’t create nationalized healthcare, but it created the framework for it and will create a regulatory system to distort the health insurance market to the point that private health insurance, whether or not “provided” by an employer, will be economically unviable. That’s why it’s so important to block its implementation and ultimately repeal it and replace it with a system that allows market incentives to control costs. So what does this have to do with Social Security?
The current framework for Social Security forces all SS tax revenue to be transferred to the Treasury. By creating the current debt “crisis,” President Obama inadvertently revealed that Social Security doesn’t have any money despite the massive “balance” in its so-called trust fund. Incremental changes must be made to the system before real reform can happen. The following outline for a Social Security Trust Fund Restoration Act is meant to be a first step in that direction. In the spirit of Rahm “Alinsky” Emanuel, we don’t want to let the President’s fabricated crisis “go to waste.”
The first step is to stop all transfers of SS tax revenue to the Treasury. Keep any cash in a separate account that Congress and Treasury can’t raid. SS recipients should be willing to accept this as a way to insure that they will receive their payments even if the government doesn’t have the money to pay other bills. In other words, take away the government’s ability to raid SS funds to pay for pork programs.
Second, force the Treasury to start buying back the IOU’s in the SS Trust Fund. If they want to issue new debt, one way to do that is to force the Administration to buy that debt from the SS Trust Fund. Another related option is to allow the SS Trust Fund to sell the government debt it holds to bond investors. This is another way for SS to raise cash to meet current and future commitments to retirees, but must be carefully metered to prevent undesirable distortions to the market for government debt.
Third, subject the SS Trust Fund to operate under the same investment rules that apply to private investment companies such as, for example, mutual funds managers and ERISA plans. True privatization of SS is politically impossible, but forcing the SS Trust Fund to operate like a real trust fund instead of a conduit into the Treasury will force the government to transition to a more diversified portfolio. As it currently stands, the system is essentially powerless to respond to a deficit. A more diversified portfolio would allow the Trust Fund to liquefy assets when needed to meet its obligations without relying on money taxed or borrowed by the Treasury. Under this system, the SS Trust Fund would actually be able to grow fund assets rather than claiming increases in paper value of government debt that is unsupported by anything of value beyond the increasingly questionable Good Faith and Credit of the United States.
This is far from a complete or perfect solution to the massive unfunded obligations of Social Security, but it is a move in the right direction that it should be possible to explain to the American people despite the inevitable lies from Democrats and their left-stream media propagandists. Moreover, once the public sees that the SS system is getting stronger and more robust, further reforms may be possible. Most people believe in the myth that there SS taxes are going into an account for them. Send them statements showing how the reformed system is benefiting their retirement and they will be more receptive to the idea of actually having personal accounts over which they have some measure of control.