Social security reform is on the horizon. It might not happen as Bush would like, with personal savings accounts, but reform is coming just the same.
What does it mean to me? The best thing I’m reading right now is a break down by Mothers and More of the impact on social security on mothers and family structure.
Some highlights:
By tying benefit levels to paid work, in effect Social Security jeopardizes women’s personal autonomy and penalizes anyone who sacrifices earnings in order to care for others. Mothers have less in private retirement savings and get lower Social Security retirement benefits because they forgo earnings in order to have time to care for others. Even when mothers work full time, the wage gap between mothers and everyone else has widened. They are less likely to take jobs which require substantial overtime and more likely to take lower paying jobs with regular hours and flexibility. The majority of part-time workers are women, and part-time workers earn 40% less per hour for doing the same work as full-timers. Of married women with children under 6, only about 35% worked full time, full-year in 1998. Women and mothers also take more time out of the workforce. Of workers retiring in 1998, women worked a median 29 years while men worked 38. Since Social Security benefits are calculated using the 35 highest earning years, mothers who work the median 29 years will have 6 zero years averaged into the calculation of benefits.
My initial belief about social security is that it should be means tested and those who qualify should be given a flat amount regardless of their lifetime earnings.
With all my time in graduate school and at home with the kids, I fully expect a cat food diet in my golden years.
Apt. 11d 
The problem with any restructuring of the social security plan is that its really just forcing what people should be doing all along: living below their menas, saving , and investing. Does this mean that people who would have naturally have spent the money now have somethign for their retirement, doubtful. Look at (I beleive)Chille. They privatized their social security 20 years ago and its created a huge mess.
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Mmmm. cat food. good with catsup.
My grandmother’s strategy was to have six. One died, one was estranged, the other four supported her in nice style until she died at 94. Maybe your two could use a little brother-or-sister? And, of course, that is the biggest problem with the system, too few future workers supporting future retirees.
Like you, I tend to think social security should be means-tested, with a diminishing amount going to people with more other assets. It is outrageous that my dad in 35 years of retirement pulled six times more out of social security – paid to the system by folks working at McDonalds, in large part – than he ever put in and he died with a million dollars in assets.
That said, Bush isn’t wrong that there is a problem with Social Security and now is the best time (except five or ten or fifteen years ago) to fix it. I hope he and the Dems can find some way to agree on a combination of means testing (‘it’s insurance against a destitute old age. if you’re destitute, you get the full amount. if you have lots of other assets, you get less’) and tax sheltered retirement accounts available to everyone. And some kind of credit for an imputed equivalent to, say, minimum-wage employment for years spent at home with young children would do a lot for stay-at-home moms.
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Yes, Dave, totally agree. I like means testing. And I like your sheltered retirement accounts.
We wouldn’t even need to have a credit for stay at home parents, if everyone (whose income fell under a certain level) got a flat amount.
But Harry at Crooked Timber, who’s way on the left, has written against means testing. He says that those programs are expensive to operate. It encourages cheating (smart people will hide their money). And it creates a negative image of the program for Americans who aren’t that fond of entitlement programs, which makes it must susceptible for elimination all together. Look at welfare.
I’m not sure I agree with Harry, but I thought I would give the other point of view.
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We already have tax-sheltered retirement accounts: IRAs, which are available to pretty much everybody. I agree with the problem of means-testing, and I propose that the way to resolve the inequity introduced by not having means-testing is to extend the Social Security tax to all earned income rather than having a ceiling on income subject to the tax.
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Americans’ Future In One Plan
I know that most of you are busy to read my book. As I explained previously that Taman Health Plan (www.trafford.com) takes care of all the health care, Medicare, Medicaid and social security. It will threw away all bureaucracies out of window. Let me explain shortly how it works:
1- there will be no more health care insurance companies, no Medicare, Medicaid or Social Security. My plan will take care of all.
2- Basically will be only one Big Health care organization (Taman Health Plan or THP).
3- The center of the plan will be in Washington while the health departments in every state will be the branches.
4- One organized body will be taking care of the Health Care and long term care of all Americans replacing 1500 insurance companies, Medicare, Medicaid and Social Security.
5- This will allow us to provide a uniform service to all Americans every where in both inpatients, outpatients and long term care.
6- As you go to any Duncan Donuts branch your expectation is to have a fresh coffee and a donut with no long wait. We will try to provide a similar predictable service everywhere as Duncan Donuts. With having only one body will be able to do that.
7- The Capital of the plan will be the funds of Medicare and Social Security (before the bankruptcy of both systems). The maintenance will be a yearly tax from each of us (will replace our yearly social security and Medicare holding taxes). A percent of each of us go to his account cards and a percent go to THP itself. The money of the plan will be invested by the investing sector of the plan very likely in Wall Street.
8- We will have 5 ATM cards with a corresponding accounts. Card A (children), Card B (working group 18-65years old), Card C (Medicare card >65 years old), Card D (Medicaid card), Card E ( expensive medicines or investigations).We will have the health cards devoted to health care and long term care thus we will have: health cards, banks with accounts to each card and credit card machines in outpatients care and hotelling part of hospitals and nursing homes.
9- Cards pay for the outpatient medical care including doctors, emergency room visits, investigations, medical supplies, pharmacies and the hotelling part of hospitals and nursing homes. While the medical part of hospitals and nursing homes will be budget by the plan itself.
10- In the first year of issuing cards: Card B and C (most of people) will have a bonus it could be a percent of their Medicare and social security withholding (70 % or so). We will try to be fair to every one but every one has to now that most of us already lost a lot of money with the HMO’s. For next year new comers to card B when first issued will have a bonus of 50,000 dollars. It will change every year by a percent a according to inflation.
11- every one of us will get a statement every one or two months of his card account. Card B account will phase in card C at the age of 65. If card C account is vanished Card D will be issued (hoteling part will be less luxurious). Only few of Card B will have card D if there account vanish most likely those with severe medical problems.
12- So basically most of us will have our own account Card B then card C. Say you are 45 and you have now in your account 200,000 you can take one or more years out of work, you Can retire early if you like and with you card you control all the medical services and its prices.
13- With this card system we will end all bureaucracies of health care, Medicare and Medicaid. No one will stand between you and any medical or long term service (only you card). Shop around with you card, have early health care security and responsibility and invest in your health.
14- We will not need Social Security since after age of 65 we will be able to use our cards to stay in any nursing home each according to our account in card C or card D. So when you invest well in your health you will be able to enjoy a nicer nursing home when you get old (actually it will be also a kind of tourism).
15- The money in cards do not get inherited when we pass away but recycle in the plan to support the next generations.
16- The plan will have very positive effects not only in simplifying our care, save a lot of wast in health care, give early health care security and responsibility to Americans it will also have a positive effect on the economy, saving billions of dollars to Americans, creating jobs in health care and cutting outsourcing.
Very like you figure it by now I could have sold the plan to one of the presidential candidate before the 2004 election for millions of dollars ( they already spent 2 billion dollars). It is my gift to the American people (it will help the healing process of the two worlds America and the Muslim/Arabs).
Maged Taman.
2/20/05
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