Reviving Social Security: A Solution for a Risk-Averse System

As a proponent of Libertarian-leaning views, I believe the solution to fixing Social Security lies in providing clear and diverse investment options, thus empowering individuals to manage their own future. This approach not only addresses the system's lack of self-sustainability but also corrects two significant flaws that disproportionately penalize responsible individuals.

Two Major Flaws in the Current System

The first major flaw is the inability to pass on residual value to future generations. When an individual dies early, their "savings" in Social Security are typically absorbed back into the system, with only a few exceptions. This lack of inheritance not only disrupts family financial planning but also demotivates individuals from contributing to the system.

The second flaw is the discrepancy between the system's risk-free status and its low rate of return. For instance, in 2019, the average interest payment was just over 2.2%, while the SP 500 showed a range of 25% gains and losses. This disparity undermines the attractiveness and sustainability of the Social Security system.

A Solution Through Diverse Investment Options

To address these issues, I propose the introduction of multiple investment options, emphasizing that any risks taken would be the responsibility of the individual. These options could include:

401(k) Savings: Allowing employers to withhold the same amount for 401(k) contributions as they do for Social Security. Home Financing: Directing contributions towards the principle payment on one's house. Alternative Investments: Allowing for a variety of other investment classes, such as real estate or stocks.

Each year, individuals would choose where their contributions would be allocated, ensuring transparency and accountability. This system would also involve regular monitoring of savings balances and adjustments to withholding rates or projected payments as necessary.

Ensuring Transparency and Accountability

To further enhance the system's transparency and accountability, the Social Security statement should be similar to a private investment statement. This would include clear displays of gains and losses, as well as projected income.

Monthly Interest Rates: A Historical Context

For those interested in historical performance, here are the monthly interest rates on Social Security investments from 1937 to 1999:

YearJanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember 1937-3.0-1.0-2.0-2.0-2.0-2.0-2.0-2.0-2.0-2.0-2.0-2.0 1938-2.0-2.0-2.0-2.0-2.0-2.0-2.0-2.0-2.0-2.0-2.0-2.0 #8230;#8230;#8230;#8230;#8230;#8230;#8230;#8230;#8230;#8230;#8230;#8230;#8230; 1999-2.0-1.0-2.0-1.0-1.0-1.0-1.0-1.0-2.0-1.0-2.0-1.0

Conclusion: Embracing Responsibility and Choice

In summary, transitioning to a system that offers multiple investment options, combined with increased transparency and accountability, would empower individuals to take control of their financial future. While change may be met with resistance, the long-term benefits of addressing the flaws in the current system far outweigh the challenges. Together, we can revitalize Social Security and ensure a more sustainable and dynamic future for all Americans.