The Social Security Debate Rages On

The debate over how to fix the social security system continues to rage on with Republicans and Democrats clearly touting different ideas. President Bush's big push is no secret...personal retirement accounts. While this idea has critics in the both the Republican and Democratic party, it appears that President Bush will continue to push the idea, if for no other reason than to leave some kind of a domestic legacy. While the idea seems all warm and fuzzy, whether the actual details of the idea fix the problem remain to be seen.

Some of the problems that plague social security are certainly the result of shifting demographics such as the aging baby boomers and their pending retirements, however, one of the most catastrophic problems that has plagued social security from the beginning is our congressional leaders borrowing from the surplus Social Security Trust Fund. You rarely hear much about this, but the whole fund is probably one big I.O.U. This is the real problem with social security, our government owes it more money than it can pay back.

As a young worker in American society, I am obviously interested in the idea of private accounts, however, I am only interested if these accounts truly make the situation better. This will only be possible if the government allows the money to be invested in the stock market through managed funds. There should be strict guidelines which prohibit individuals from day trading with this money or any other high risk endeavor. Americans already struggle enough to save money as it is. The savings rate in America has dropped to an all time low of less than 1%. The last thing we need is thousands of people throwing their money away on craps. This will only worsen the problem.

It must be pointed out though, the managed funds that people are allowed to invest in should have minimal investment expenses, and varying degrees of investment objectives from aggressive to very conservative. A worker in their twenties will obviously need to invest differently than someone in their late fifties.

Lets all hope that the solution that is finally settled on is the right one, and not some politicians pipe dream of leaving a domestic legacy, Democrat or Republican.

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One Man's Opinion