The President’s nephew, George P. Bush makes a lot of sense in his article in the DallasNews on social security:
George P. Bush: Lawmakers can’t ignore Social Security problems
A generation’s future hangs in the balance
If you’re in your 20s or 30s, why should you care about retirement when it’s more than three decades away? Because if Congress doesn’t act now to reform Social Security in this session, our generation will not enjoy one of the most cherished entitlements sought by all working Americans.
The problem with Social Security is a simple mathematical issue: There are fewer people paying into the system and more people taking out. And it’s getting worse.
People are living longer and having fewer children. The result is that the number of workers paying Social Security taxes to support one retiree has fallen from 40 in 1940 to 16 in 1950 to 3.3 today – and it will be down to a 2-1 ratio by the time our generation retires.
Most people are under the impression that Social Security is a savings account sufficiently funded to provide benefits to our parents and the rest of the baby-boom generation when it retires. However, when Social Security begins paying out more than it collects, in 2017, the only way to meet its obligations will be to increase our taxes, cut our benefits or borrow massive amounts of money that will add to the debt burden on our generation. And the problem will only get worse as we near retirement and Social Security continues to make promises it cannot afford to keep.
Why have members of Congress not represented the interests of our generation? The answer is that they think we don’t care about the solvency of Social Security. After all, very few of us bother to get involved with the political process in the first place.
Result: Congress has mortgaged our generation’s right to Social Security benefits to satisfy current debts, with members confident that their decision-making will not affect their re-election efforts.
President Bush, however, knows how much trouble Social Security is in and wants to act now to strengthen the institution so that we have the same opportunities in retirement that our grandparents have had and our parents will have. Some in Congress have said reform is not needed, as Social Security’s health is not currently a crisis. What kind of leadership is this? How can we afford not to act quickly when we know that the system’s insolvency is imminent?
True, Social Security isn’t bankrupt yet, but if we don’t tackle the crisis now, the cost of doing so in the future will be staggering. Notwithstanding criticism that reform would endanger the system’s viability, President Bush has made clear that this promise of guaranteed benefits would be kept for those near or at retirement. Still, incremental reform affecting our generation’s benefits must be undertaken or the entire system will capsize.
One way to achieve this goal is through voluntary personal retirement accounts. These accounts would give Americans in their 20s and 30s the option to take some of the taxes they already pay into the Social Security trust and save the money in their own individual retirement accounts. Each person who chooses to put money into a retirement account would make the decision about how to invest that money.
We would be able to invest in a safe mix of bond and stock funds in order to increase potential returns on our hard-earned tax dollars without tremendous risk. In several decades, as our generation nears retirement, we would be able to invest in funds that would shift toward even safer investments – such as government bonds – to help protect our accounts from volatility in the stock market on the eve of our retirement.
This nest egg will give us an opportunity to receive a higher rate of return than the current Social Security system can provide. For example, someone who earns an average of $35,000 a year during the next 35 years under this system could expect to have nearly $250,000 saved in a voluntary personal retirement account.
Our generation has a choice. We can ignore the problem and accept that the Social Security system will be bankrupt when we retire. Or we can support reforms to the system, including personal accounts, so each of us has more control over our own money.
To me, the choice is clear.
George P. Bush is a Dallas lawyer who campaigned in 2004 for his uncle, President Bush. He wrote this column for The Dallas Morning News.