Pessimism v. Optimism

[kandrathe]

Hi,
Two problems that I see right away: first, how do you handle the transition? People like me who've paid into social security all their life can't jump into a time machine and invest that 15% in a 401K. So, do I just get screwed out of those funds? Second problem: how does your plan work if 150 million of those people you're depending on to be intelligent, responsible, rational individuals all spend their funds on pizza and beer? Because they will. A plan predicated on the intelligence of the population is a plan doomed to failure before it starts.

And, who is John Galt?;)

--Pete

Yes, I agree, the transition is hard. I guess I would break the population into three groups; the ones young enough to abandon the old way and begin the new way (<30), the ones who will dabble in both(30-50), and the ones too old to get any benefit from the new way(50>). For the ones in that later category we will still need to probably raise the retirement age to 68 or 70 (people live longer now anyway), trim things back to make them more affordable (probably by doing what Medicare does by fixing the price that will be paid for a service), add means testing to federal benefits, and definitely use the personal account as the medium for allowing the person to make the best decisions possible. For those people in the middle, I would suggest a fixed government contribution into their accounts over 20 years from tax revenue inversely proportional to their age.

Your second part is not a problem, since the spending can only be for certain services and can be managed just as HSA's are administered currently (special debit card usable at Dr's office and pharmacy, or reimbursement). If you wanted to ensure that people (acted smartly and) had something in their accounts you could mandate a minimum percentage of the gross pay get directly deposited. As a libertarian, it makes me feel queasy to force people to do the right thing, but again if we are going to play nanny, then we can do it in a way that lets people to take care of themselves in a less fascist manner. The most important part of this is to remove the temptation of big money and spending from the US Congress.