By Mark David Blum, Esq.

Back in 1985 or 1986, I wrote a paper in college about how Social Security was going to be broke by the year 2012. I called then for a solution and referred to it as being, “the necessary slaughter of the sacred cow.” Most if not all of the information that served as the basis for my conclusion came from the Congressional Record. The cause of this situation is obvious and really not in dispute. We have ignored the hot third rail of Social Security for too damn long.

President Roosevelt made a promise to me. He made it to my children and the children of their grandchildren. Never again would Americans be obligated to work until they drop dead. We as a society just will not tolerate hungry homeless people who have given all their lives to working to raise a family and who for whatever reason are unable to put aside something to carry them through retirement. A sacred promise was made to the entire nation. That promise should never be forgotten or set aside.

We should always have in place a safety net that will catch anybody for whatever reasons whose retirement and savings falls below a certain level (to be determined by people smarter than am I). Nobody should ever have to go through life fearing starvation and homelessness as the reward for a lifetime of work and contribution. That should be set in stone as a civil and basic right for every single American. Heck, if the Iraqis can guarantee it to their citizens, why cannot we?

But, what about the person who does succeed in life? How should we look at the person who through luck and effort or inheritance and happenstance has for themselves a retirement income above, or well above that basic protection we promise to everyone?

Historically and through today, Social Security has always been viewed as an annuity. You pay into it today and when pooled with everybody else’s contributions, the proceeds and profits generated over your working life are paid out to you in amounts based on your life expectancy and the benevolence of Congress. It has always been seen as being “my money”; not the property of the government, but your money that is returned to you when you reach retirement age.

Through no fault of our own, we were hit with the phenomena of the Baby Boom and the subsequent squeezing of the birth rate. These factors contributed to a shift from large numbers supporting the few to the few supporting the large numbers. Coupled with substantially increased life expectancy, the burden waiting for our children to pay for the current system is unfair and significant.

One simple and quick fix changes the entire system. It substantially reduces the burden of social security, it expands the benefits the system could pay out, and saves our children’s grandchildren untold tax burdens.

If we change our perspective of Social Security from being an annuity to being an insurance policy, the problem is alleviated.

Take everybody who is born today. You have no idea how well or poorly each is going to do and you have no idea what kind of tax contribution each can make or how much in services each is going to consume. Now, design a social security system.

If you start with the insurance model, you say that for every citizen of this country we promise each other a minimum standard of living. Nobody has to worry about homelessness or hunger or medical care. We will make sure of that with a tax system where everybody has to contribute. Every citizen pays a premium to insure the “insurance” is available upon retirement.

Now take a citizen … 65 (or whatever) years after their birth. At the time of retirement age, that citizen who through whatever means, has had a successful life, or invested well, or hit the lottery, and has a retirement or private pension plan of their own, is without need for them to collect on that insurance. If when they hit age 85, the former employer steals their pension, or their stocks tank, or doctors take all their money, then the citizen can collect on that insurance.

But, once a person has hit retirement age and is living at a standard above whatever we determine as being a minimum income level, they should not be eligible to collect Social Security. There is no need to collect on that insurance policy. You made it! Be proud and thankful you do not have to live at a base level.

When you buy a medical insurance policy and pay premiums for 10 years and remain healthy that entire time and then die suddenly, you cannot call the insurance company and demand a full refund. The same should apply to Social Security.

In doing so, we can purge many many people from the system who really do not need a safety net while at the same time, reducing the actual burden upon the then working class. The cost of this insurance would be lessened so that payroll taxes can be kept under control.

Right now, the money I pay into Social Security is supposed to be set aside for my use when I reach retirement age. Instead, the money I pay into the system is actually being used to pay my mother’s Social Security. There is nothing that Social Security gives me right now other than a promise.

So, I hope a solution is soon found. Otherwise, you might find me living in your doorway in about 20 years.