As the “Boomers” begin their journey into the age of Social Security, let’s do a little exercise in the numbers using our tried and true “old Math”…

We all realize that the money we will be getting from the bankrupt Social Security system will be coming from our grandkids and great grandkids…our children are now paying the freight for those drawing Social Security benefits now, as those of us still working are also doing….I will be 62 this year…using my own situation as the example in this exercise, I will attempt to offer the government a way to initiate the process of fixing this system, and reducing the annual deficit in the process…

According to my latest Social Security account statement, over my working lifetime, I (and my employers) have contributed just over $80,000 to this system…if I understand the process correctly, the government will match these contributions dollar for dollar over the course of my ‘retirement’…that gives us $160,000 to work with that is ‘paid for’ in my account…according to my statement, at age 62 I will be able to draw $956 per month…this amount is sufficient to replace my current income from my part time job, where I currently make around $1,000 per month on average….meaning…I can quit working without having an impact on my current financial situation…now on to the math…

At $956 per month, I would draw $11,472 per year, and dividing that into the $160,000 account funding gives us a life expectancy of the benefit package of just under 14 years…or until I’m 76….at that point, I will exceed the designed break even point of the system, and will begin to become a part of the budget deficit until I cease to exist…at which point, if I am survived by my wife, she can assume my benefit (which is twice hers) until she passes…so we can assume that if we live as long as our parents, we will eventually become part of the problem in a real statistical sense…my parents died at ages 82 and 84, my mother in law is 85, and will be 86 in April…my grandmother passed at age 95…so you can see where I’m headed with this…

“Unsustainable” to describe this situation isn’t just an understatement…it’s absolutely ridiculous in terms lip service from our elected representation, yet not one of them chooses to present any real options to correct the situation, so….let me make a couple of realistic suggestions…and I have some heartburn with the recent ones coming from the President’s “Debt Commission”….so here are a few things for the Congress and president to seriously consider…

The Tea Party really was born during the TARP fiasco, but the real impetus behind its enormous growth over the past 2 years has been the accelerated deficit spending of BOTH parties over the past decade or so…the ignorant assumption that simply firing up the government printing presses will have no future negative consequences makes everyone in government look like greedy, irresponsible financial simpletons…which, until last November, most were…but WE were the ones that allowed this to happen, and absolutely NOTHING will change unless WE change it…so let’s consider a few options…

How many of us “Boomers” have seen the writing on the wall, and planned accordingly???…How many of us out there are actually prepared to retire and live comfortably???….Perhaps the anticipated tour of the European capitols may not be realistic, but the bills will be paid, and a Carribean cruise or two may have to provide a realistic t for Europe…How many of us are sincere in the effort to solve this country’s financial problems???…I am…and if even 25% of us are, we can make a major contribution to our kids and grandkids by simply tightening the Social Security belt just a little…here is my suggestion, again, back to the “old Math”…

What happens if we offer the “Boomers” some options???…I have a few suggestions….people who are very well off upon reaching SS retirement age may choose to opt out of the program entirely, taking what monies have been contributed to the system out in a tax free ‘lump sum’ payment and going merrily on their retirement way…this takes the rest of us off the hook for any future payments, and gives the wealthiest of us a chance to contribute directly to the effort of solving the problem….they get their money back, but no more…

While we’re at it, we could make that option available to ANY individual upon reaching retirement age…folks on decent, secure pensions may choose to elect this option to pay off their mortgage and other debt, freeing up most or all of their pension income…or to start a retirement business, which brings up another option…remove the income cap for taxes on SS employment income…punishing a retiree for continuing to contribute to the national economy is beyond my comprehension, and just another example of government greed at the expense of the people…let’s face it, we are retired…NOT DEAD!!!…limiting us to being minimum wage greeters at the local WalMart is an insult to our age, experience, talent and energy…this also has the added benefit of making many of us LESS dependent on the Social Security system, making it therefore that much easier to rein in…as I am about to suggest….

Let’s say, upon signing up for Social Security payments, I have an ‘option’ on the initial form that allows me to select a benefit payment that is 10% LESS than the full entitlement….this election is voluntary, so that “Boomers” that need all of their benefit check may still receive it, but for others in a more secure retirement environment may choose to become a small part of the initial solution to this major financial problem, and extend the timeline for its eventual resolution….let’s start with just one retiree…ME….

Again (I’m an old school, simple individual) the ‘old Math’ tells us this…10% of my SS check would be $95.60 each month…I sincerely doubt that would drive me into poverty, at least not in the current economy…coupled with the removal of the income cap, that would allow me to reenter the economy on MY terms, or simply retire to a beach somewhere….now the math….$95.60 annually equals $1,147.20…there are over 80 MILLION “Boomers” out there ready to retire, I’m just one of them…if I represent any sort of ‘median’, and we extend this optional benefit reduction out to include just 10% of the group of pending retirees, we begin to address some real savings…and a tangible reduction of the impending doom of the program….the numbers for 8 million “Boomers” taking a 10% reduction in SS benefits (at my ‘median’ annual savings) equals a reduction of the SS annual outlays of $9,176,000,000.00….over the 20 year life expectancy of my payments (using my parents longevity as a guide) this is approximately 182 Billion in payment reductions….what if 25% of the retirees were to opt for this reduction???….nearly a half TRILLION over 20 years…50%???…

$100 a month will not noticeably affect my retirement lifestyle, and will at least begin the process of addressing this most critical issue…it’s at least an honest attempt….and I think most Americans concerned for the future of their kids and grandkids would be more than willing to share at least a bit of the burden to help secure a better financial future for all Americans….over 60% of our Federal budget is entitlements….why don’t we start an honest conversation about reducing this huge obligation here???…

God bless and Keep America…

Tom Backers

Kalkaska (Michigan) Tea Party Patriots

Even the health care debate currently has much of its opposition towards the “new plans” based on the fears of people who receive medicare, which was once attached to social security yet has now sprouted legs of its own. Right or wrong, an attempt of changing such a process for all its flaws, is risking “reconsideration” of those who have a current stake in how that process is handled;  Those government junkies.

The investment of hopes, fears, and a hell of a lot of taxpayer dollars have been made for the retirement dreams of America through the social security administration, and its ongoing failure to negotiate a fiscally sound path is constantly made ever more difficult by the narrowing of the path and the reduction of the resources to sustain it.  A pyramid (ponzi) scheme on a government sized scale that currently has as a liability speculated to be nearly $107 TRILLION by some experts..

It was a plan that begged to be abused by lawmakers since its inception.  A “fund” that was originally created to provide a guarantee that older Americans would have a safety net retirement, turned into a piggy bank raided regularly by new entitlements to the young and old alike for always changing reasons. The more programs attached to it, the more difficult it has become to even consider changes. The dependency of a certain sector of Americans has resulted in the inability of our leaders to ultimately cut spending, and perhaps places our entire health care system in jeopardy for all the wrong reasons.

NOW we have another.

The federal government has created a new dependency class.  A new welfare class has been born…  The auto worker.

GM still employs Tens of thousands, is trying to recover from a bankruptcy, has an unknown stock value. AND, cannot now fail, or those folks will be out of a job, the tens of Billions spent keeping the company afloat will be lost, and any politico who endorsed the bailout of the company would wear its failure like cement boots during a leisurely swim in the Detroit river.

The federal government, which now effectively operates GM, cannot sell it back to the private sector, and the UAW which also owns a stake cannot in good faith negotiate with itself.  Its value is zero outside the ownership of the government, as it cannot make autos at a profit, and requires incredible  short term “incentives” for the marginal sales it is doing as it is.  The fact remains, GM cannot survive on its own.

Further, there are arguably, thousands of small businesses which rely on business from automakers, and particularly GM for much of their bottom line.  Many of them have their entire equipment inventories based on the production of parts for the automakers, and the failure of that sector would wreck them. Allowing GM to fail will be seen as unacceptable.

Much like a ghoulish reanimated corpse, GM will be kept in motion by periodic infusion of funds provided by the taxpayers.. (an arm or a leg) or it will die.

That will be the argument for the “public automobile option.” In Michigan, where we still have tens of thousands of “interested parties, there will be little call for eliminating the white elephant known as GM from the public dole.  The ongoing crisis of the automakers will see a plug that can never be pulled for “government motors,” lest too many, in too fragile a state, “get hurt.”