Monday, October 18, 2010

Solution For Great Recession / Double Social Security Benefits


Seniors take note and unite ~ here's the solution for the current Great Recession and it makes total sense. Double the current Social Security payment and make it a true National Retirement Plan. This would not only financially bolster the 75% of Retirees whose main source of income is an average benefit of $1,072 a month but would instantly increase consumer spending and GNP: Allen L Roland

Here's an issue that all seniors can unite around and should become an instant campaign issue. The Social Security Administration said last Friday that inflation has been too low since the last increase in 2009 and has decided to not award its annual Social Security cost of living increase in 2011 ~ the second straight year this has happened since these adjustments were first adopted in 1975.

Here's the big picture ~ while Congress spends 12 billion dollars a month on our two ongoing illegal occupations of Iraq and Afghanistan as well as bailing out Wall Street to the tune of over a trillion dollars ~ 58.7 million retirees and beneficaries on Social Security benefits are asked to survive and thrive on an everage benefit of $1,072 a month.

The Obama administration has promised a one time $250 dollars to Social Security recipients as an election year carrot or pacifier but, of course, the proposal failed in the senate when a dozen Democrats joined Republicans to block it.

There is something very very wrong with this picture and Steven Hill, Truthout nailed it in his must read article of October 13, DON'T CUT SOCIAL SECURITY BENEFITS, DOUBLE IT ~ where Hill correctly writes " a collapsed housing and stock market, combined with increased inequality even before the Great Recession, have drastically reduced Americans' personal savings. In short, the "retirement stool" no longer is stable and secure, and suddenly Social Security, which always has been viewed as a supplement to private savings, is the only leg left for hundreds of millions of Americans ... Studies show that people in the bottom two income quartiles depend on Social Security for 84 percent of their retirement income, and even the second-richest quartile depends on Social Security for 55 percent of its retirement income. Only the richest 25 percent of Americans don't rely heavily on Social Security."

Hill correctly identifies the real Problem ~ " But the real problem with Social Security is not, as its critics say, that it is underfunded. Contrary to gloomy predictions, the program is on solid financial footing, with the Congressional Budget Office projecting that Social Security can pay all scheduled benefits out of its own tax revenue stream through at least 2037... The bigger problem is that Social Security's payout is so meager, which is problematic since it has been thrust into this new role as a de facto national retirement plan. Currently, it replaces only about 33 to 40 percent of a worker's average wage from the year prior to retirement (compared to Germany, where it replaces 70 percent). That is simply not enough money to live on when it is your primary - perhaps your only - source of retirement income... "

Here's Hill's logical solution to the problem ~ " Doubling Social Security's individual payout would cost about $650 billion annually for the 51 million Americans who receive benefits. Here are some ways to pay for it. First, lift Social Security's payroll cap that favors the wealthy. Currently, Social Security only taxes wages up to $106,800 a year, and any income earned above that is not taxed. The net result is that poor, middle-class and even moderately upper middle-class Americans are taxed 12.4 percent (split between employee and employer) on 100 percent of their income, but the wealthy pay a much lower percentage. Millionaire bankers effectively pay a paltry 1.2 percent.... Making all income levels pay the same percentage - that's how Medicare works - is popular with Americans and would raise about $377 billion. Second, with all Americans receiving Social Security Plus, employer-based pensions would be redundant, so businesses no longer would need the substantial federal deductions they currently receive for providing employees' retirement plans. These deductions total a whopping $126 billion annually.Those two alone would provide three-fourths of the revenue needed to double Social Security's payout. Other possible revenue streams exist " See full article ~

So there you have it ~ a rational common sense approach to not only jump start the economy but to relieve the stress of million of seniors who are existing on the very edge of poverty.

As Hill concludes ~ " In short, Social Security Plus would provide a stable, secure retirement for every American and contribute greatly toward a solid foundation from which to build a strong and vibrant 21st century US economy."

It's time for seniors to stop accepting $250 dollar bribes and demand a true National Retirement Plan built on a realistically funded Social Security investment which will not only financially sustain our retirees but will represent a true bottom up investment in our future versus our currently failed top down approach to economic recovery.

Seniors unite ! This is our campaign issue for this election as well as 2012.

Allen L Roland


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