They also want to force workers to invest their payroll taxes in a single, government-controlled global index fund. But that wouldn?t work, because it would quickly make the government the majority stockholder in every publicly traded company. Imagine Uncle Sam as the owner of Microsoft, GE, and so forth. Bad idea.
Ironically, the authors have a simpler solution, and one that might actually work: personal responsibility.
We can begin trimming Medicare spending, they write, if every individual would start taking better care of himself (quit smoking, exercise, give up junk food) and start playing a role in his own health care. ?We could realize an $11.7 trillion ?dividend? by being engaged and informed in our health care decisions,? they write. Doing so would start to put a dent in the $38.7 trillion Medicare shortfall.
Personal responsibility would work for Social Security as well.
A recent pamphlet from Lincoln Financial says, ?Fulfilling your retirement destiny. The power is yours.? Those of us with 401(k) plans or IRAs already understand that. Now, we need to extend that power to all workers by allowing them to invest some of their payroll taxes in a Personal Retirement Account.
PRAs would help workers take advantage of compound interest by allowing them to invest over decades. And individual workers, not the government, would own the accounts,. So while every American will have the chance to join the ?ownership society? and build a nest egg for retirement, we won?t have the government taking ownership of every industry.
You?ve probably heard a lot of scary things about PRAs. The Center for Media and Public Affairs recently found that 83 percent of the comments aired on the big three network evening newscasts were negative comments. 83 percent. How?s that for fair and balanced?
But the fact is that there?s really no downside to PRAs, because if a worker wanted to remain in the traditional Social Security system (and thus remain dependent on the government to finance his retirement), he could do so. But it seems unlikely many people would remain in the traditional system, because they?d want control of their own future.
We can build a retirement structure that will withstand the coming generational storm, and PRAs should be the foundation. Let?s get started, before the storm arrives.