In the last essay, recommendations were made for changes to tax deferred retirement plans, that would be just and best for the general welfare. Now let us proceed in the same manner for Social Security.

In Responsibility #54, it was mentioned that when Social Security was enacted in the 1930s, it was a bare bones pension plan. Its piddling cost was not a burden to the businesses, and employees, who were called upon to bear it.

Over the decades, more and more of the population was brought under the Social Security System. More and more benefits were placed under the SSS umbrella. It now covers not only (1) retirement income, but also: (2) health care after retirement, (3) disability income (income for those who must retire early because of disability), and (4) a special kind of life insurance (income for minor children plus spouse upon the death of the participant).

The piddling cost (employer plus employee contributions) in the 1930s, of about 2 percent of the first $3,000 of the employee's earnings, has escalated to over 15 percent of more than the first $50,000.

This is a tremendous burden on those now in the work force, and on small and marginal businesses. The burden plays a part in the lack of competitiveness, of even our larger businesses, against foreign challengers. It is partially responsible for driving jobs over borders and seas.

It too can be considered a violation of property rights, in that current wage earners are being required to pay more, for the same benefits, than earlier contributors had to do. It is not unlike unlawful pyramid schemes, in that the benefits of those presently receiving them is dependent upon the later entrants to the Social Security System paying much higher contributions. These later entrants will be dependent for their benefits on still later entrants, who must contribute the same or even greater contributions to keep the system going. Quoting from a newspaper article of March 4, 1992, surveys are "showing that many workers under 35 don't believe they ever will reap the benefits of their Social Security taxes".

There is divided opinion as to the prospects for the SSS. The article cites remarks from a speech by the current Social Security Commissioner: ".... by the end of 1992, Social Security will have a $336 billion surplus". ".... the system will continue to provide benefits, without any hike in taxes, for the next 50 years".

On the other hand the article cites the opinion of her predecessor Commissioner: "The book predicts disaster by early next century because the number of workers paying taxes into the system won't keep pace with the growing number of beneficiaries." ".... wage earners could be taxed at a rate of up to 30 to 40 percent to prop up Social Security benefits; recipients may have to accept smaller checks; or the system will simply shut down because the U.S. Treasury will be unable to pay." ".... there is no sinking account or special reserve that could be used to pay what she terms Social Security's big 'IOU'."

Whether we accept an optimistic or a pessimistic point of view, we must recognize that the future of Social Security is dependent upon the solution of all of our nation's economic problems: huge annual deficits; horrendous national debt; continued bailing out of banks and S&Ls; unchanged obligation to guarantee deposits of surviving banks and S&Ls up to $100,000 each; actual or implied obligation to guarantee still ballooning Government Sponsored Enterprises loans of over $1 trillion; possible requirement to bailout Defined Benefit pension plans; possible call to bailout bankrupt insurance companies; continuing high trade deficits; unemployment; and limited growth.

Solution of our nation's economic problems are co-dependent on curing our government and social shortcomings: election process, abuses and usurpations of the three branches, public servants in place of aristocracy, conduct of foreign relations, respect for Right to Life, immorality, integrity of families, education, health hazards, health care, and poverty.

In her letter accompanying "Personal Earnings and Benefit Estimate Statements" in 1989, the Commissioner of Social Security had the following to say: "But, keep in mind that Social Security was never intended to do it all. That is why I encourage you to build a complete financial package by supplementing your Social Security with private pensions, savings, other insurance, and investments."

In essence, President Roosevelt in the 1930s was establishing a "safety net", for those who had no means to support themselves, when they were too old to work. With our national commitment to end poverty, a safety net would be provided for all Americans of all ages (see Responsibility #46 to #49). Hence, for current and future wage earners, who are not already in or close to retirement, we can shift from the present unfair Social Security provisions, to ones recognizing the responsibility of each individual, to provide for his physical and financial needs now and for the future.

The following is an outline of the features of an Individual Base Retirement Fund for this group, to replace the present Social Security System. These features will be discussed in more detail in the next paper.

1. Each wage earner be required to have his wages or salary reduced by 10 percent, for investment in his Individual Base Retirement Fund. For married couples, the investments of each working spouse would be split for equal investment into each of their IBRFs.

2. A cap be established, at each age of the participant from 18 to 70, on the accumulated value of the IBRF. All excess to be refunded for investment in other retirement plans, or for other use as the participant desires.

4. Initially (and for the next several decades), investments in IBRFs be in federal government debt securities, paying a fixed rate of interest.

5. At retirement, participant to have two alternatives: (1) redeem government securities and purchase an annuity to provide a set monthly income for life, or (2) select a program to redeem government securities at a rate to provide a fixed monthly income for a prescribed number of years beyond the average life expectancy.

6. The investments in IBRFs be non-income-tax-deductible. The earnings would accrue as taxable added value to the debt securities (at redemption).