Will there be a social security system in our future? Predictions are that the system will dry up in three decades, unless something is done soon. The path to solvency heads off in different directions, as presidential aides debate the question.
One concept comes from former Social Security Commissioner Robert Ball. It would have the government invest some of the funds in the stock market. A second plan would require individual savings accounts managed by the government to supplement benefits. That translates to a hike in the payroll tax. A third idea is to have the current system replaced with personal accounts managed by the individual. With more risk, there are few nods from the experts on this last one.
Jerry Mashaw of Yale Law School likes the Ball approach: to invest in the stock market.
"The government continues its promise to pay. It's managing the money and it can average out over time the ups and downs of the stock market"
Recently, House Speaker Newt Gingrich registered his view in calling for a National Commission on Retirement to start a dialogue on ways to save the huge pension system. Gingrich, without being specific, envisions private-sector options for younger Americans. He said critics of reform "don't understand free enterprise and...the power of compound interest." He added, "Our goal is to have a winning formula for every generation"
Lisa Davis of the non-profit Committee to Save Social Security and Medicare senses the urgency to do something but adds: "It's not an insurmountable problem by any means. I think as long as people want Social Security to be there for them, it will be."