Don’t fix Social Security if it isn’t broken

[struggle4progress]

Article By:
• Kevin Leahy
• [e-mail]

Mention Social Security to most people and watch the life drain out of their eyes. I’m guilty of it, too, because discussing bureaucracy is just no fun. On the other hand, the government does take a bite out of your paycheck every two weeks. And nearly everyone is concerned about where their money is going. (Although if you’re not one of those people, feel free to send me the unused portion of your paycheck.)

Social Security works like this: a little more than 6 percent of your paycheck goes to payroll taxes; your employer matches that amount unless you make more than $88,000. In that case, you and your employer’s contribution is capped at $5,456. That money is used to send checks to retirees and the disabled.

In about 40 years, give or take, the Social Security system is probably going to run into money problems. People are living longer and having fewer children, so the ratio of workers-to-retirees is shrinking. At some point, many economists say we’ll have to either reduce the benefits we pay out or raise the payroll tax.

The president’s solution is to privatize the system - in other words, to take the money from Social Security and put it in the stock market. That would be the famous Enron, WorldCom, took-a-nose-dive-five-years-ago stock market. Not the safest choice for your nest egg. <snip>

http://www.star.niu.edu/articles/?id=8942