Wednesday, September 5, 2012

Can we supplement Social Security with junk mail?

More on this concept later but it is important to note first that, according to a new Associated Press-GfK poll on public attitudes about Social Security, “…53 percent of adults said they would rather raise taxes than cut benefits for future generations.”  Keep in mind that this is today’s adults thinking about their kids and grandchildren.  There are 36% that would cut benefits and most of us would agree that are the radical conservatives, including primarily the Tea Party.

To help balance the SS budget, another “…53 percent said they would raise the retirement age, while 35 percent said they would cut monthly payments.”  Because many low income seniors depend entirely on SS as their sole means of income, an across the board cut here would not be fair.  But Social Security is one of those American institutions that we have come to expect; sorta like setting a legal precedent that guides a court in their decisions.

Now the GOP would have us believe there are ways to play with SS and make it better.  Republican supposed genius, V.P. contender Paul Ryan, presented a plan in 2005 to privatize Social Security in a way that brought such a colossal price tag that even the Bush administration called it “irresponsible.”  Further, he wants to reduce the amount of money paid out overtime leaving seniors in the lurch when costs go up.  All because of a refusal to raise taxes on the wealthy.

47% said they trust President Obama to handle SS better than Mitt Romney at 44%.  Although Romney is against raising taxes on the higher incomes, he is for slowing the growth of benefits for those with higher incomes.  In 2008 Obama said he would raise the level on Social Security payroll tax from $110,100 to $250,000.  It is obvious that what is needed is a combination of increased taxes with program adjustments, and perhaps some limitation of benefits. 

The Young Turks on Social Security one year ago:

Only 20% of young adults (those under 35) think that SS will be there for them when they retire.  And this is where that wild idea of mind came into being some seven to eight years ago that we could supplement Social Security income in the future using some of the profits the junk mail list industry makes from the sale of your name and personal data.  I know this because I spent 35 years in junk mail selling you name and private information making a lot of money.

By my estimates—and this is because junk mailers refuse to release to the public just how much they make from what should be your personal property—the list industry grosses over $4 billion every year from you name and personal data.  I came up with a formula back in 2004 to determine what would happen if one-half of that $4 billion was placed in a simple interest-bearing account in the early stages of your working career that you could tap at age 65.

The outcome was that junk mail shoppers could supplement their retirement income by an average of $607 per month.  Since a majority of Americans do buy regularly through mail order, they would automatically enrolled in the program.  Plus, when the advantages of this program were noted by the balance of the population, junk mailers would naturally add new customers.  Those people remaining would then be more manageable for the feds.

In 2008, nearly 40% of retirees received their income from Social Security.  Maybe it is this group where junk mail supplement should be most applied, using some kind of formulation for fairness.  Another 19% have pensions and annuities, 23.7% from earnings, 15.4% from other assets such as IRAs.  However, in low-income households, 87.6 of their income came from Social Security, another profile the junk mail supplement should favor.

In all cases, high incomes and the wealthy would be eliminated from receiving the supplements.  These conditions combined would easily increase the $607 monthly figure for others.  

FDR signs SS Act in 1934
What we have agreed on here is the fact that we want to save Social Security and most of us prefer that it stays close to its current format.  Yes, we have to attack the two biggest drains on the economy, SS and Medicare, but we don’t have to take a scalpel to it as the GOP would have us do.  A junk mail supplement may be a far out answer to the problem but, then, Social Security was considered unparalleled when FDR signed the SS Act in 1934.

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