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Retire Social Security Debt and Save The Economy --- What If?

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Submitted by Steve Selengut | RSS Feed | Add Comment | Bookmark Me! print

What if the US Government sold the Social Security system/employees/buildings/DEBT/etc. to Insurance/Annuity industry companies for the amount of the debt plus a few billion --- all in cash plus secured debt of the hundreds of companies involved in the purchase?

The money would be turned around immediately to repay the trillions in government (Social Security Trust Fund) IOUs and it would be invested in guaranteed fixed income annuities (guaranteed immediate annuities for those already receiving benefits) --- absolutely a guaranteed winner for a presidential candidate.

Yeah, it also should involve the eventual conversion of all public sector retirement plans to SSRIAs (Social Security Retirement Income Annuities). There would be no publicly funded retirement plans. All employed persons (from the very top down) would contribute to their own personal, portable, SSRIAs --- but at about one third of current mandated payroll deductions.

Employees could choose to contribute more than the required amount, and the funds would move electronically to the assigned private sector provider. All tax payers would be eligible to create SSRIAs and there would be no matching employer contributions. SSRIAs could be an available income investment option for all private sector retirement programs, qualified and otherwise.

That's right. In one fell swoop we can reduce employee and employer taxes, increase personal disposable income, eliminate thousands of government jobs and replace them with private sector employment. It just doesn't get any easier than this.

NOTE: SSRIAs would be assigned to providers, so expenses would be minimized and covered entirely by an investment management fee. Private auditing firm employees would be rotated randomly between providers to assure that Investment Policy Statements are complied with.

But there's also a Phase II. All SSRIA benefit payments, without exception, will become 100% tax free at all levels for yet another uptick in personal disposable spending money --- spending that an intelligent (and "fair") consumption tax could use to run a more streamlined and less lobbied (corrupt) government.

Another benefit of this approach would be the requirement that the insurance company "general account" investments supporting the now "for real" SSRIA trust fund are subject to "Old Fashioned Portfolio Theory" --- vastly different from the MPT (Modern Portfolio Theory) approach that has failed for everyone except its Wall Street conspirator-creators.

Retirement programs of any kind (Defined Benefit or Defined Contribution) should be focused on providing certain streams of monthly income to plan participants --- market values just don't pay the bills. The SSRIA investment mix will focus on safety and income production instead of the probabilities of negative correlations between varying speculations creating a rise or fall in market value that is less embarrassing to the plan sponsor.

MPT is a methodology that encourages speculation. OFPT (Old Fashioned Portfolio Theory) focuses on Quality, Diversification, and a growing stream of "base income". Base income is the actual cash received from a portfolio's investments in the form of annual dividends and interest --- the stuff that retirement income is made of.

It may well have been the combination of MPT, and the equally nonsensical Trustee/Investor rules of the Uniform Prudent Investor Act (UPIA) that single-handedly led to the speculative bubbles that caused the global financial crisis masacre of hundreds of thousands of "trusteed" retirement portfolios.

MPT creates wealth for Wall Street's ETF production factory. OFPT creates wealth (and dependable income) for investors and retirees. Note that OFPT is the body and soul of the Market Cycle Investment Management methodology --- the methodology the Wall Street bubble machine would rather you didn't know about.

Never again should "we the people" be held hostage by a circus filled with self-serving politicians, now adding further insult to their mis-management of our retirement funding dollars in the first place. Let's elect people who will redirect our retirement funds to fundamentally safe products that have provided uninterrupted retirement security to millions of people for centuries.

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