How to eliminate poverty and retire rich
By Samuel L. Blumenfeld
There is much talk these days about Social Security, how to save it, how to reform it, how to partially privatize it. I have a better idea, one that I've been thinking about since 1982. Here's what I wrote back then in a column in a local newspaper:
That was my plan in a nutshell. Of course, the federal government's yearly expenditure for the program would probably now be more than $4 billion. But in 65 years it will be getting its money back tenfold. Also, a l0% interest rate is probably unrealistically high. But a bank would have to pay you its highest Certificate of Deposit rate on such an account, which might run from 4% to 10%. In addition, the individual owner of the account would be permitted to add money to it at any time, thus increasing its balance at a faster rate than by interest accumulation alone.
The present Social Security system ought to be phased out in favor of the Birthday Account Retirement System (BARS). Taxpayers pay twice for Social Security. First, they pay into their Social Security account through payroll deductions or Income Tax Returns. The federal government then spends that money on whatever its needs may be, placing in the lockbox of the Social Security Trust Fund, IOUs in the form of Treasury Bonds. Now, who do you suppose will be taxed to pay off those Treasury Bonds? The same people who were taxed in the first place for Social Security.
As we all know, no senior on Social Security can retire on those monthly payments alone. It was never meant to be a retirement program. It is in reality only an old-age assistance program. However, the Birthday Account Retirement System would be a genuine retirement program which, at minimum, would consist of balance accumulation by compound interest, and, if added to by the account owner, could eventually turn into a nest egg of millions. Such an account, protected from the ups and downs of the stock market, better than any insurance company annuity, protected from government pilferage, safe from the greedy hands of unlovable children, would provide seniors with the psychological and economic security they need.
Should the account owner die before reaching 65, and by the way, the age 65 is not chiseled in stone, money would then go to a spouse or children according to the will of the account owner. It could go toward paying off a mortgage or paying for a college education, which may or may not be necessary 65 years from now.
If this program can be started this year, a whole year's worth of babies will not have to worry about what they will be living on when they reach the age of 65. Many of those babies will turn out to be highly successful men and women by 65, but many others will have been living at the edge of poverty. How nice that at 65 they will suddenly be rich. A heck of a lot better than trying to win a lottery!
So far, I can see nothing wrong with this plan. If you can, please let me know. But if you like the idea, inundate President Bush's desk with copies of it, and send your Congressman a few copies too.
Samuel L. Blumenfeld is the author of eight books on education, including, "Alpha-Phonics: A Primer for Beginning Readers," "The Whole Language/OBE Fraud," and "Homeschooling: A Parents Guide to Teaching Children." These books are available on Amazon.com.
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