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Social Security Reform Thursday: Week Fifty-Seven -- Personal Accounts Are Awesome.


Thursdays are good days for reform, because they fall between Wednesdays and Fridays. Just because the status quo'ers got their way in 2005 does not mean the problem has gone away. Indeed, it's getting worse with each passing day. Thus, Reform Thursday continues.

That's why WILLisms.com offers a chart or graph, every Thursday, pertinent to Social Security reform.

This week's topic:

Of All The Solutions, Personal Accounts Are The Only Win-Win-Win Scenario.

Reading Don Luskin's blog, I came across this graphic from The New York Times:


Behold, compound interest. Working. Over time. Just like Social Security personal accounts would work.

The Times' story explains how a provision allowing Americans, in 2010, to roll over their traditional tax-deferred retirement accounts into Roth IRAs, where investment gains can be withdrawn regularly, tax-free, will "cost" billions to the government.


It will save billions from government misuse. It will prevent billions from falling into the hands of pork-and-entitlement-loving fools. It will keep billions in the free enterprise system, in the hands of actual American human beings.

And, ultimately, a portion of all that wonderful wealth generated by the tax relief would find its way back into government coffers. A 10 trillion dollar economy with a generic 10% tax rate produces more tax revenue than a 7 trillion dollar economy with a generic 14% tax rate.

Tax cuts, the more I examine the historical evidence, do indeed pay for themselves-- and then some.

But that's not the point.

The point is that personal retirement accounts via Social Security would be remarkably similar to the account shown in the graph above. Hundreds of millions of Americans, of all income levels, could be busy accumulating many trillions of dollars of wealth, with minimal effort and LESS expense than under the current Social Security regime.

Personal accounts are the best solution to Social Security's woes. They are clearly better than cosmetic, temporary fixes, such as raising the retirement age, raising the tax rate and/or cap, cutting benefits, delaying benefits, and so on.

Herman Cain explains what needs to happen:

If members of Congress are serious about preserving the Social Security program without needlessly increasing payroll taxes or reducing benefits, they must immediately take the following three steps.

First, members of Congress must stop denying Social Security faces a solvency crisis. To deny the solvency crisis is literally akin to denying that the sun rises in the east.

Second, all members of Congress must end the raid on the surplus and pass the DeMint amendment.

Third, Congress must pass HR 1776, “The Ryan-Sununu Social Security Personal Savings Guarantee and Prosperity Act.” HR 1776 would allow workers to divert a portion of their forced payroll tax contributions to a personal retirement account they own and control. In 75 years the entire system would be solvent, without having to reduce benefits or raise taxes.

Want to give "the base" a reason or two to show up this November?
Want to grow the Republican party, especially among young people?
Want to fundamentally fix the single largest current government expenditure?
Want to boost the national savings rate above what is effectively zero?
Want to pare down the national debt?
Want to boost the fuel injector of our free enterprise system, a.k.a. the stock market?
Want to make American workers more competitive in the global economy?
Want to make the United States less socialist?
Want an enduring "legacy making" accomplishment?

Then reform Social Security. Do it now. There are trillions of good reasons for reform. Let's get on it.

The clock is still ticking:


Previous Reform Thursday graphics can be seen here:

-Week One (Costs Exceed Revenues).
-Week Two (Social Security Can't Pay Promised Benefits).
-Week Three (Americans Getting Older).
-Week Three, bonus (The Templeton Curve).
-Week Four (Fewer Workers, More Retirees).
-Week Five (History of Payroll Tax Base Increases).
-Week Six (Seniors Living Longer).
-Week Six, bonus (Less Workers, More Beneficiaries).
-Week Seven (History of Payroll Tax Increases).
-Week Seven, bonus (Personal Accounts Do Achieve Solvency).
-Week Eight (Forty Year Trend Of Increasing Mandatory Spending).
-Week Nine (Diminishing Benefits Sans Reform).
-Week Ten (Elderly Dependence On Social Security).
-Week Eleven (Entitlement Spending Eating The Budget).
-Week Twelve (Benefit Comparison, Bush's Plan versus No Plan).
-Week Thirteen (Younger Americans and Lifecycle Funds).
-Week Fourteen (The Thrift Savings Plan).
-Week Fifteen (Understanding Progressive Indexing).
-Week Sixteen (The Graying of America).
-Week Seventeen (Debunking Myths).
-Week Eighteen (Debunking Myths).
-Week Nineteen (Reform Needed Sooner Rather Than Later).
-Week Twenty (Global Success With Personal Accounts).
-Week Twenty-One (GROW Accounts: Stopping The Raid).
-Week Twenty-Two (Millions of Lockboxes).
-Week Twenty-Three (Support for Ryan-DeMint).
-Week Twenty-Four (KidSave Accounts).
-Week Twenty-Five (Latinos and Social Security).
-Week Twenty-Six (AmeriSave).
-Week Twenty-Seven (Cost Of Doing Nothing).
-Week Twenty-Eight (Chile).
-Week Twenty-Nine (Entitlement Spending Out Of Control).
-Week Thirty (Reform Better Deal Than Status Quo).
-Week Thirty-One (Social Security As A Labor Cost).
-Week Thirty-Two (Social Security And Dependence On Government).
-Week Thirty-Three (Social Security, Currently A Bad Deal For African-Americans).
-Week Thirty-Four (Longer Life Expectancies Straining Social Security).
-Week Thirty-Five (Howard Dean & Salami).
-Week Thirty-Six (Growing Numbers of Beneficiaries Draining Social Security).
-Week Thirty-Seven (The Crisis Is Now).
-Week Thirty-Eight (Disability Benefits).
-Week Thirty-Nine (Broken Benefit Calculation Formula).
-Week Forty (German Social Security Disaster).
-Week Forty-One (Crumbling Pyramid Scheme).
-Week Forty-Two (Overpromising, Globally).
-Week Forty-Three (Demographic Wave).
-Week Forty-Four (The Jerk Store).
-Week Forty-Five (Defined Benefit Plans).
-Week Forty-Six (Even The Empty Promises Are A Bad Deal).
-Week Forty-Seven (Our Aging Population).
-Week Forty-Eight (The Tax Increases Required To Cover Social Security's Costs).
-Week Forty-Nine (Much Longer To Get Your Money Back From Social Security).
-Week Fifty (A Vote, At Last).
-Week Fifty-One (We Can Do Better).
-Week Fifty-Two (Socialist Security).
-Week Fifty-Three (China Has The Same Problem, Only Worse).
-Week Fifty-Four (Potential Crisis Size).
-Week Fifty-Five (The Crisis Moves Closer).
-Week Fifty-Six (Big Brother Social Security).

Tune into WILLisms.com each Thursday for more important graphical data supporting Social Security reform.

Posted by Will Franklin · 18 May 2006 08:44 AM


Will, I have a question for you, because I have not investigated this: who in your opinion of likely 2008 presidential prospects has the best position or energy regarding SS reform?

Posted by: Ken McCracken at May 18, 2006 07:43 PM

A question and a suggestion.

Question: Where can I find an eight percent ROI? My accounts aren't doing nearly as well.

Suggestion: Let's change the name from Social Security to Individual Security.

Posted by: Hootsbuddy at May 19, 2006 05:08 AM

I will have to think about that one, Ken... a lot of the top ones have said very little about the issue.

Posted by: Will Franklin at May 19, 2006 09:36 AM

It will prevent billions from falling into the hands of pork-and-entitlement-loving fools.

But that's precisely what the NYT -- and liberals in general -- means by costing the government money. As in they won't be able to fund yet more worthless and destructive feel-good entitlement programs, and bribe yet more voters.

Posted by: rightwingprof at May 19, 2006 01:28 PM