Investors Business Daily runs through Fred Thompson’s plan for Social Security
There’s very little gain in this for Thompson politically. He will now take potshots from the AARP and other special interest groups, not to mention those on the left who will falsely accuse him of trying to “dismantle” Social Security.That said, hats off to Thompson for his plan. It would trade off future benefits of those now working — people over 57 wouldn’t have their benefits touched — in exchange for letting them create 401(k)-style accounts. He would have government match the private savings that workers put in. And it’s entirely voluntary.
Workers could put aside as much as 2% of their Social Security money in a private investment fund. Upon retirement, they’d have a nest egg to pass on to their children. They’d also have the higher returns markets have always provided in modern history.
Democrats have pushed for a tax hike to “fix” Social Security. It won’t work. The program already takes 12.4% of the average worker’s pay. Raising the tax would hurt the economy by making it more costly for businesses to hire workers and to give out pay raises.
We’re not especially keen on the matching part of the plan, which looks a lot like income redistribution to us. Still, Thompson’s proposal will solve what is without question the biggest fiscal problem this nation faces over the next century: paying for the surge of baby boomers who start drawing Social Security next year.
Without showing the American people that they can do better without the government, we’ll never get rid of SSI. To think otherwise is Pie in the Sky.
This plan, while nowhere near optimum for getting rid of Roosevelt’s Ponzi Scheme, will lay the ground work for that eventuality and gets my seal of approval.