Tuesday, December 6, 2011
Art Laffer Praises Newt's Social Security Plan: This SS Reform plan is worth a look
I like any Social Security or Pension Reform plan that expands Freedom of Choice in how people can plan for their own retirement. As long as there's a Floor of Income that people could count on. That under my plan would be 125% of the Federal Poverty Rate or roughly 25K$ a year right now. So if people were to blow their Retirement Fund through bad investments or business deals, bad economy whatever. They would at least have the Social Security Minimum that they could count on. Which today is 14-15$ a year which to me seems way too low, thats only around 60% of the current Poverty Level. And some people rely on that for all of their income and then have to rely on Public Assistance and Private Charity to make up the rest. Get that up to around 25K$ a year and that would help take some of the strain off our Public Assistance and Private Charity. My plan is what's called Social Security Plus which is a plan that was developed early in the last decade or even before that in late 1990s. When the last Bi Partisan Commission on Social Security was established that didn't produce a Final Product. Newt Gingrich's plan is similar to this but he would allow people to put their Payroll Taxes in the Stock Market and other investments. What I would do is leave the Payroll Taxes in the SS System but allow people to increase their own Payroll Tax. That their employer would match and they could use that revenue not to spend. Unless they pay a 100% Penalty on their consumption that would go into the SS System. But they could use that money to invest in the Stock Market or other Business Ventures. Like their own business, investing in a business, a side business to go with their regular job, money they make in Real Estate. Any Lawful Investments they may make and it would be their choice.
Social Security Plus that then Senate Minority Leader Tom Daschle endorsed back in 2004 when the Bush Administration. Was looking at Social Security Reform, and they developed a similar Plan to the Gingrich Plan. Won't save Social Security on its own but it would reform our Pension System by giving people the Freedom of Choice to plan their own retirements. And so people aren't so heavily dependent on Social Security and have more Retirement Security when they retire. Because if your completely dependent on Social Security to pay your bills, your living in poverty. Your making around 15K$ a year and probably living off of Public Assistance. So this is why SS Plus would be beneficial for those people who are the Working Poor. Not Poor Workers but Workers who live in poverty because we could expand the Earned Income Tax Credit to allow them to be in SS Plus as well. But to save the Social Security System, we have to fix the financing and turn it into more of a Welfare Retirement System. For the people who need it, by increasing Payroll Taxes on people who afford it and only having people who need it collect from it. And lowering taxes on the people who get hit hard by the Payroll Tax. And making the floor of Social Security Benefits 125% of Poverty so they can survive easier.
I don't agree very often with Newt Gingrich especially on Social Issues and the War on Terror. But he tends to come up with good and interesting ideas on Economic and Education Policy as well as Social Welfare Policy. And his goal of giving people Freedom of Choice in Retirement Income, is solid and worth considering. Even though its different from mine but at least he's put a plan on the table and if Mitt Romney did something like this. Months ago maybe he would have the Tea Party behind him and not trailing in the polls right now. Having republicans believing he's a centrist.