Social Security Problem, Solution

AP, Oct 18, 2006, Washington.

Social Security checks for nearly 49 million retirees are going up by 3.3 percent next year — an average increase of $33 per month, though rising health care costs will take a bite out of the gain. The monthly benefit for the typical retiree will rise to $1,044 from an average of $1,011 this year. The cost of living adjustment announced Wednesday by the Social Security Administration will go to more than 53 million people. Nearly 49 million receive Social Security benefits and the rest Supplemental Security Income payments aimed at the poor. The 3.3 percent increase compares with a 4.1 percent benefit rise in for 2006, which had been the biggest increase in 15 years.


The Social Security program began in 1935 when most people did not live past age 65, so, in the design, people only saw what they wanted to see. People always fail to see the unseen consequences in a government program. It takes years before the people want the problem "reformed". The free market discovers problems quicker and corrects the problems. Like any government program, they all eventually show their design defects.

One way to solve the social security problem of the future is to prohibit cost of living raises to the youngest age group, each year. For 2007 there should be no COLA, ever, for those who are 62. In 2008 there should be no COLA, ever, for those who are 63, in 2009, for those age 64, etc. If this policy is followed each year for the next age group, 65, 66, 67, etc., after 20 years there will be a stair step benefit raise for each recipient as they get older and unable to work. Inflation will reduce the value of the amounts younger recipients get. People born after 1950 are not able to collect full benefits until age 67. The COLA freezes will, with inflation, reduce the overall expenses of the Social Security program.

Bilbo Baggins