Social Security vs Special Security

Social Security is a pyramid-scheme. FDRoosevelt intended to convert it to a pay-as-you-go system before it imploded, but he deferred the pain of conversion to his successors. Growing population and increasing tax rates have enabled Social Security to continue operating. But, like all pyramid schemes, Social Security is destined to fail when the tax rate becomes intolerable (eventually, a rate exceeding 100% will be required).

If Social Security were run privately, the operators would be charged with criminal fraud, that's how transparrently dishonest it is. The fix is so simple it's hard to believe it wasn't implemented by President Reagan in the 80's. Instead, he let the Lib's fortify the failed system by increasing the tax rate. To his credit, President Reagan admitted raising the Social Security tax rate was the biggest mistake of his presidency.

The solution is to create a new system called Special Security that taxes 1% ( plus 1% to the employer). This increase will be required soon anyway, so put it into a viable system instead of throwing it away on Social Security. The new tax is to be invested in personal accounts for the sole benefit of the contributor. The tradeoff is that every dollar drawn from Special Security subtracts from the Social Security payout. In time (approximately 30 years), Special Security would completely buyout Social Security. That is the power of compound earnings.