Archives for September 2014

SAVING SOCIAL SECURITY — a viable plan

 

 SAVING SOCIAL SECURITY
How WE can make the U.S. Social Security System solvent again!

Let’s ELIMINATE our Social Security DEFICIT, while we INCREASE extra income to U.S. citizens, simultaneously, on $10 per week per capita
Introducing the Social Security Fund (SSF)

By investing $10 per week in SSF, you will SAVE our Social Security System so that the funds are there for YOUR retirement and your children’s retirement – AND you will have the chance to get EXTRA retirement income of $5000 to $50,000 above Social Security benefits for your efforts!

For $10/week every year, We, the American People can:

  • Create billions (even trillions) in Social Security revenue
  • And get  a chance at $5000 or $50,000 in capital gains with every weekly investment

And best of all, with investment in the SSFUND, there is:

  • No need to Privatize part of Social Security,
  • No need to increase the retirement age for benefits,
  • No need to increase F.I.C.A. or other taxes,
  • No need to cut Social Security benefits,

And by the way, investment in SSF is up to YOU. Wouldn’t YOU like to be a winner?

We now have less workers feeding FICA revenue into Social Security and more retirees taking it out; however, SSF eliminates that revenue gap with no cost to the Federal Government. That’s right. The U.S. population will pay its own way through investment in the Social Security Fund, and save Social Security in the process!
With this plan, non-citizens can also invest, and, in effect, support the American Social Security system! And, yes, they can win these capital gains awards, too, but in a lesser amount.

And again, what do the American people get out of this investment?

First, they get the opportunity to get ‘extra’ income through capital gains awards of $5000 and/or $50,000
Second, and most important, they stabilize our Social Security system and eliminate the deficit FOREVER!

“Per Capital” was mentioned. What does ‘per capita’ mean?
If you take the total money collected and divide that by the total number of citizens, this is the ‘average’ investment or ‘per capita investment’.
Obviously, some will invest less, some more, always with the chance of winning. This is the basic logic of a State lottery. For instance, in 2004 the actual ‘per capita’ spending on the Rhode Island State Lottery was $26 per week, far more than most state lotteries today.
Therefore, the reasoning is that if State lotteries can collect that amount of money, then so can the Social Security Fund.
Investments might be available for $1, $5, $10, $15, $20, $25, and $30, per week.
But remember, that, as envisioned, only two prizes or awards are possible:
$5000 or $50,000.
The world is made up of many ‘gamblers’ who are willing to take a chance in order to win those sizeable awards.
This is the philosophy used in the Social Security Fund. Some citizens will spend $1-5; others will jump at the chance to win a huge prize, and will invest $20-30 or more, and the ‘average’ will be the $10-12 per week desired – or more.

How does the SSFUND work?
SSF is like an Index Fund on the stock exchange with computer-generated gains (but no losses as in a normal Index Fund).
At your discretion, investments go to SSF as follows:

  • U.S. citizens can use funds from IRAs, payroll deductions or discretionary income;
    banks would be a logical place to make investments, and company payrolls can make deductions available to employees to make it easier
  • Non-citizens use discretionary income at a bank

Where the money goes:
That invested money ($169 billion the first year) is divided by the SSF as follows:

  • 41% of all invested funds go to Social Security; in year 1:    $69.3 Billion
    (And, by the way, our 2011 SocSec Deficit is $49 billion)
  • 5% of all invested funds go to the administration of SSF.    $ 8.45 billion
  • 54% of all invested funds are returned to investors as follows:
  •       95% of that 54% is given as capital gains of $5,000;    $86.70 billion
  •          5% of that 54% is given as capital gains of $50,000;    $ 4.56 billion

And since these awards are declared as ‘capital gains’, our Federal government also wins with this program right up front.

With a weekly investment of $10 the odds of receiving capital gains awards are 1 out of 24 participants – every year! This means that EVERY AMERICAN CITIZEN could receive a capital gains award of at least $5000 over 30 years.
For the same weekly investment, 1 out of every 136 citizens could receive a $50,000 capital gains award over 30 years.
This is a phenomenal achievement at $10/week invested!

However, the major triumph of this program is that our Social Security System will be SOLVENT forever with investment in the SSF, and every citizen will receive his benefits at age 62 to 65 with no concerns about Social Security.

Can we make ‘age’ a factor in getting these awards?
Since the capital gains awards are computer-generated by SSF, awards can be skewed to favor the oldest group who probably need income the most, thus increasing the odds for seniors to receive these awards. As the population ages, each age group will cross age boundaries and have more chances to be awarded capital gains.
A Social Security number verifies the age of an investor.
Non-citizens will support our social security system with their investments, pay the same, and have the same opportunity to get cash awards as U.S. citizens; however, their awards will be smaller. This is fair since they are not citizens. Since non-citizens won’t qualify for Social Security benefits, this plan may entice many to apply for U.S. citizenship, thus increasing our Federal tax base.

WHERE THE MONEY GOES — $ IN BILLIONS
RESULTS BASED ON Excel Spread Sheet COMPUTER STUDIES by Ray Mathews
Bold Italic underlined numbers are Trillions of dollars
Studies are based on a U.S. population of 315 million with 3% added for non-citizens
(Total Population = 325 million), and an increase in population to 417 million in 30 years.

$10/week

$520/yr     yrs>                           1                       10                            20                      30
Total to SS                                 91.0                 967                            2000                3130
Total $5000 awrds                 65.6                  697                            1450                 2260
Total  $50k awrds                    3.45                 36.7                            76.1                     119
No. of $5000 awards         13,124,592       139,468,639      289,095,469      452,073,736
No. of $50k awards                    69,077             734,045           1,521,555         2,379,335

$26/week (See below for explanation)

$1,352/yr     yrs>                          1                      10                                20                      30
Total to SS                                      274                  2880                        6050                   9500
Total $5000 awrds                       129                   1360                          2850                 4480
Total $50k awrds                            6.80                  71.4                            150                      236
No. of $5000 awards         25,836,862          271,147,873          570,036,590    895,595,615
No. of $50k awards                   136,000         1,428,000               3,000,000       4,720,000

The $26/week Case Study is based on the Rhode Island lottery per capita expenditure of 2004, and is merely presented for comparison to a real State lottery only.
At $26/wk/capita ($1352/yr), everyone in the U.S. would get capital gains awards of $5,000 or $50,000 in just over 10 years, and many would get multiple capital gains awards; Social Security would receive 9.5  trillion in revenue; investors would receive over 4.5  trillion in capital gains; and there would be almost 900 million recipients of $5000 or more and almost 5 million recipients of $50,000.
Our Federal government would get taxes on all capital gains awarded plus taxes on all returns on these awards, if desired.
THAT is the power of the SSF investment.

And just a point of interest to show what folks are spending on lotteries, for example, here is the ‘per capita spending per year’ for the top 10 states for 2009:
State                        $/year        $/week
Massachusetts    $806.57            $15.51
Delaware               $633.66             $12.18
Rhode Island       $598.20             $11.50
W. Virginia            $558.10            $10.73
New York               $451.19              $ 8.68
Georgia                   $435.89              $ 8.38
Maryland               $362.55              $ 6.97
New Jersey            $354.82             $ 6.82
Connecticut           $345.18             $ 6.64
Michigan                 $312.00            $ 6.00

From the 2011 Annual report on the status of Social Security and Medicare programs, the committee’s conclusions were as follows:
“Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided.”

But where will our government find the ‘legislative corrections’ (money) to fund these programs in the future? Our Federal government is having difficulty merely keeping the country running every year!

Imagine the country-wide interest in the Social Security Fund investment, when folks realize that they not only have a chance to win sizeable capital gains awards, but that they will ultimately SAVE our Social Security System and make it solvent – forever.

The bottom line is: Everybody Wins: Our Social Security System, the individual citizen, non-citizens, and our Federal government, while stabilizing our Social Security System.

Bear in mind that this is a template for the Social Security Fund program. Creative individuals in our government could tweak these numbers to get the most possible for Social Security while retaining great capital gains awards for investors in the Social Security Fund
As the author of this system, I have run many case studies while altering the variables. Selecting the ‘right’ set of numbers is crucial to the success of this program.