Barr has a plan to save Social Security – what about McCain and Obama?

Have you noticed that neither Barack Obama or John McCain are talking about our Social Security crisis?  Why is that?  It is disconcerting.

I stumbled across an article today in the Washington Times that included a solution to the looming bankruptcy of our nation’s Social Security crisis – and as I finished reading the article I came across the author’s name – none other than Bob Barr, the Libertarian Party’s presidential candidate.

Here is Barr’s plan to save our Social Security program:

True reform of Social Security requires shifting control of retirement decisions to workers and their families, moving from a government pay-as-you-go system to an individualized system of private accounts. In the long-term, this would expand freedom of choice, increase retiree returns and reduce government expenditures.

Private accounts would not be a jump into the unknown. In 1981, Chile switched from a pay-as-you-go system to private investment accounts. A score of other countries across Asia, Europe, and Latin America have followed Chile’s lead.

The principal fiscal challenge arising from private accounts would be the so-called transition cost, which is financing Social Security benefits for current beneficiaries while current workers are shifting tax payments into private accounts. There is no escaping this budget pain.

However, under my proposed reform – with a quick shift to private accounts and phasing new workers out of Social Security entirely – costs peak early and begin to diminish, in contrast to the present system, in which the red ink explodes and never ends.

Benefit cuts are undesirable, but trimming payments is more fair than hiking taxes, which would only exacerbate the system’s existing infirmities. First, we should adjust wage indexation, which increases benefits faster than inflation. Second, we should raise the retirement age, since life expectancy has increased by 18 years since 1935.Third, we should consider other benefit adjustments, such as fixing the consumer price index, which overstates the impact of inflation.

Other spending cuts – in corporate welfare, nonessential domestic programs, and military outlays for defending everyone but the U.S. – also will be necessary. If these reductions are insufficient to fully fund the transition, it might be necessary to consider short-term borrowing. Though not desirable, these obligations would be more than counterbalanced by eliminating today’s massive unfunded liabilities as a result of moving to a self-funded system.

If you are interested in finding out more about Barr’s campaign for the U.S. Presidency, go to this link.

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"Admin" is just editors Vern Nelson, Greg Diamond, or Ryan Cantor sharing something that they mostly didn't write themselves, but think you should see. Before December 2010, "Admin" may have been former blog owner Art Pedroza.