It looks like Social Security reform will be a Big Item in the coming congress. So what do you all want?
Do you want a social safety net (ie only payments to the poor. That is cheap and affordable but most people - 90% say - get nothing) or some money for everyone (which costs more)?
Do you, personally, want more in benefits (and in payments) or less in benefits (and less in payments)?
If the benefits decrease, what will you do with the money? Save it, I presume, but how? How much do you save now?
If you post your opinion, please also tell us a) are you in the US or elsewhere (US Social Security is in general less generous than European government pensions) and your age.
Drew,
Do you, personally, want more in benefits (and in payments) or less in benefits (and less in payments)?
This is the wrong question in my opinion. This is also where the politicians and the media continue to miss the problem. The more useful question is:
Do you want Social Security to be funded in advance or do you want it to operate like the world's largest Ponzi scheme?
We currently use a Ponzi scheme and it only works well when you have many more workers than pensioners. Moving to a fully funded system (where your social security contributions are saved for your future use) is preferable. The problem with doing so is that it calls attention the liabilities of the Social Security program – that is, we do not sufficient funds available to cover everyone's contributions to date). This is a huge liability and Kerry mentioned this amount many times in his attacks on Bush. What he didn't realize is that we already have this liability no matter how we invest the money…
Once we make the decision to move to a fully funded system, then we can discuss rate of return vs. risk (making everyone buy US bonds and fund our debt or putting some of it in the stock market).
A well designed Social Security system could provide increased benefits with less payments. The biggest problem is the Ponzi scheme itself, not the size of the payments.
Here is how Margaret Thatcher toned down the Social Security system in England:
She said people currently retired would continue to get their benefit. People who were 60 would get just about that (since they had no real time to save to compensate for not getting the expected benefit). At 40 you would get a fraction, but left. At 25 you would get only a small benefit, because at 25 you have time to save on your own. (She set up a "401k equivalent" for savings).
This didn't shaft people who hadn't saved and were old without time to save but did lower the burden as time passed and the people still alive and drawing benefits gradually got less and less money.
There still was a transition cost, as those people still working pay more than they will receive, but at least it tries to minimize that transition cost.
It's a model to consider.