From Krugman's op-ed
The thing about Social Security is that from the beginning
it was designed to encourage misconceptions. It looks, on casual inspection, like a giant version of a private pension plan. You pay into such a plan during your working years, contributing to a pension fund, and when you retire you receive payments from that fund in proportion to the amount you put in. ...
I'm pretty sure that it was set up to look like an ordinary pension fund because that made it politically easier to sell. But in reality, Social Security has never been run like a private pension plan.
I get a lot of mail from people saying that we should simply eliminate the upper limit on the payroll tax. That would certainly raise a lot of money. But bear in mind that there's no fundamental reason Social Security has to be financed with payroll taxes —
we only do it that way because back in 1935, F.D.R.'s advisers thought it would be a good idea to dress Social Security up to look like a private pension fund.
yes ; a deceptive ponzi scheme was how it was designed .
Another way to "save " the program is it's gradual elimination to be replaced by Personal Treasury annuity accounts (PTAs ).
Instead of the payroll tax being deposited into a fictional SS trust fund ;it would be deposited into a PTA . That PTA would be invested into US Treasury mutual bond funds owned by the person who is taxed, and managed by the Treasury Sec. .
At the age of eligibility that person has the option to withdraw funds on a schedule annuity based on life expectancy . When the owner dies any remaining amount in the PTA would get transferred to beneficiaries .
The phase out would begin with new workers into the workforce and would take up to 50 years to complete.As the PTAs get established workers who had started to pay into SS could be incorporated . Funding would have to be found in the short term for existing recipients of SS benefits ;and those who have already paid into the SS system. But gradually those obligations on the taxpayer would be reduced . It eliminates the threat of insolvency and gets rid of an intentionally flawed and misleading retirement system.
The benefits outweigh the short term costs .
A beneficiary gets what they earned and not what some pol thinks they should get.
The funds being transferred to beneficiaries would eliminate a gross unfairness that is inherent in a SS eligible person who has paid into the system their whole working life dying early and having SS benefits cease . Currently if you take your first Social Security distribution at age 65 and then die one year later, your heirs receive nothing.
The current system is unfair in that a man's life expectancy is lower than a woman's ; a poor person's life expectancy is lower than a middle class person's .Black's life expectancy is less than Whites at this time. etc.
Politically it is a win -win. It forces the Dems to admit that the current system is NOT a pension plan . It is a massive wealth transfer from the young to the old. The system as a whole should appeal to young workers who are paying into a system that they will never get a benefit from.