The Bollich Social Security Plan

Social Security Plan

1. Abolish Social Security
1. Reasons

i. Social Security is a pyramid scheme. It relies on a pay-as-you-go system where only those already receiving benefits gain in the short-run. Younger workers pay for the old.

ii. There is no trust fund. Money to pay for social security benefits comes immediately from payroll tax and the surplus is put into general revenue and written off as an IOU.

iii. Social Security discourages savings by placing the burden on government instead of the individual.

iv. The 6.2% payroll tax for employees is a myth. The actual figure is 12.4%. Employees are paid a salary 6.2% lower than they deserve in the first place due to the real costs to employers.

v. Over the span of 1935-2000, the rate of return for social security was well under 5 percent (2 percent?) while the returns on stocks was 10.2 percent a year and the return on bonds was nearly 6 percent.

vi. Due to the regressive payroll tax cutting off at $90,000 and the greater ability of wealthy individuals to invest excess income, the system most negatively effects lower and middle class income earners.

2. Plan

i. The U.S. government could easily issue bonds in the amount of the total Social Security liability ($8.1 trillion), deposit the bonds in the accounts of all current retirees and payers of the payroll tax (to the extent of their payments to date), abolish the payroll tax and close the system.[1]

ii. This would increase the national debt from $5 trillion to $13.1 trillion (in name only)[2] but would also save $400 billion a year in Social Security payments.

iii. Rescind the Bush tax cuts and use money to create a means-tested welfare program to target those who are actually poor.

2. Deregulate Pharmaceutical Industry
1. Reason

i. The elderly are the biggest victims of the greed of the pharmaceutical industry.

2. Plan

i. Allow more generics into the market, encouraging competition and resulting in lower costs for consumers.

ii. Allow competition from foreign producers, most notably Canada.

iii. Clearly, protections would be put in place to make sure drugs are safe and accurately labeled.

3. Create Culture of Savings
1. Reasons

i. Social Security has left individuals dependent on government for their retirement security.

2. Plan

i. Offer financial incentives to schools who initiate programs to teach children about savings.

ii. Provide community programs for older citizens.

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[1] http://www.capmag.com/article.asp?ID=3421

[2] The debt actually stands at $13.1 trillion when taking Social Security into account.