A Nation of Millionaires
An Alternative Plan for Social Security

Paul O’Neill is proposing an innovative solution to America’s Social Security problem. O’Neill, who was the country’s Treasury Secretary until Bush fired him for disagreeing with his agenda, believes the nation should create investment savings accounts for every American at birth. The plan would make Americans millionaires when they reach the retirement age of 65 and perfectly capable of providing for themselves in their old age.

Under the plan, the government, through the auspices of its taxpayers, will initially place $2 thousand in each account. An additional $2 thousand will be added to the account each year until the citizen reaches the age of 18. After that, the fund would increase through compounded interest until it reaches an estimated $1,013,326 at retirement age. This would be enough to provide each citizen with an annual annuity of $82,000 for 20 years, certainly enough to live on in today’s society.

O’Neill’s innovative concept is certain to meet with resistance in Washington, especially in the Bush White House where the president is still pushing his plan for the citizens to play the stock market with a portion of their Social Security funds. Bush continues to push for this suspect program despite mounting evidence that it won’t work and is even proclaiming it an essential “component of any solution” for reforming the Social Security program.

O’Neill’s plan seems more apt to develop an “Ownership Society” than George Bush’s and is certainly on more solid footing. The program would cost $8 billion in the first year and would eventually reach $144 billion per year after four million children are added to the program annually until it levels off after 65 years.

This might seem like a large sum of money, but it pales when compared with the money wasted on the cost of the Iraq War, currently estimated at $156 billion, or the more than $960 billion the country has squandered on its War on Drugs, which has been nothing but a dismal failure in its almost a quarter of a century of existence.

Social Security and Medicare currently cost American taxpayers around $815 billion annually. O’Neill’s plan would eliminate the need for Social Security and Medicare.

However, this long-term plan won’t help current retirees or tax payers. And it certainly won’t help replace the missing $1.6 billion trust fund the government has misappropriated from today’s Social Security system, which is the actual cause behind the current concerns over Social Security. When the first people to receive benefits under O’Neill’s plan retire sixty-five years from now it would be the year 2070, which is 28 years beyond 2042, which is when the current Social Security system will run dry if changes aren’t made to the program.

O’Neill’s plan deserves scrutiny --- it sounds too good to be true --- but it certainly is a fresh idea in Washington, where innovation is a rarity. Personally, I would like to see a provision that would enable citizens to invest their funds in the purchase of homes, which are the only proven solid long-term investment for most people in this society. This would actually make America an “Ownership Society,” not just a bunch of political rhetoric.

Many aspects of the plan must be examined, of course, including the dangers of everybody being a millionaire. Inflation caused by the increased wealth of the population should be a major concern, but the plan still makes a mountain of good sense compared with Bush’s ill-disguised attempt to channel Social Security funds into the investment industry.

Links for More Information:

http://www.news-leader.com/today/20050227-Formersecretary.html

http://seattletimes.nwsource.com/html/nationworld/2002191407_oneill27.html