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Every now and then, someone will say something that you already knew, that pretty much everyone knows on an innate level, but it suddenly dawns on you that it's something utterly absurd and inexplicable and fundamentally wrong. You can almost see and feel the light bulb flashing on over your head.

In this case, it's the thought that public sector employees ought to be part of Social Security.

For a long time, fiscal conservatives have pushed for members of Congress to be subject to Social Security -- paying their taxes, collecting their benefits. And we've all known, at some level, that not just members of Congress, but pretty much all state and federal employees are exempted from mandatory participation in Social Security.

Correction: Members of Congress were exempt from Social Security for most of its history, but were enrolled in it during the Reagan administration. But for the vast majority of federal and state employees, Social Security participation is strictly optional.

But why? After all, Social Security is a part of the federal government, administered by these employees' brethren. Why don't they trust their brothers and sisters in service with their retirement benefits?

This reform would go light-years towards bringing a sense of responsibility and accountability to Social Security, and to government employees in general. It would give an infusion of fresh revenue to this grand Ponzi scheme that's been ongoing for nigh on a century (OK, almost 80 years), but this time from people who quite frankly deserve to be part of the scam that is Social Security.

This also brings to mind an oft-repeated statement by Howie Carr (Boston Herald columnist and New England talk show host): he has made a standing offer: he will forgo all of his contributions to Social Security, renouncing any and all benefits for him and his heirs, in exchange for not having to contribute any more for the rest of his life. The Social Security administration can keep his 40-odd years of payments, if he can just not pay any more for the rest of his working life.

Sounds like a good deal, but he's yet to be taken up on it.

So here's the radical notion: all public employees ought to be required to participate in the public "retirement plan" that is Social Security. Conversely, those not on the public payroll can choose to "opt out" and exchange all their past payments into the system for future exclusion.

Punishment for the public sector? Not at all. Just a condition of their employment. We expect employees of big corporations to demonstrate their faith in their products. There was a bit of a stir a few years ago when Ford hired a new CEO who owned a Mercedes. Bill Gates most likely does not have a Mac in his home (except, perhaps, as a doorstop). Coke gets irate when its celebrity endorsers chug a Pepsi in public.

And as we, as a nation, value freedom and choice and liberty, why shouldn't people be allowed to choose to not participate in Social Security? Oh, I suppose, as a compromise we could require people to participate for at least a few years -- say, a decade or two -- before they can opt out, but the Carr Option is hard to refudiate if one is intellectually honest.


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Comments (17)

I LIKE it. Fianlly someone ... (Below threshold)
ron:

I LIKE it. Fianlly someone is coming up with an idea that will work.

The Gov. is complaining about SSI might go down. This would also replace some of those raise the taxes ideas. Raising the SSI general income by what 3-4 million people might make a difference.

I also like the idea that it would make government employees more sensative to these same issues. Double dipping retirement? Make the current retirement plans for gov workers voluntary; require a larger contribution from them for it and SSI mandatory.

As to the opting out??? Well(as ol' Reagen would say) Might be a tough sell that one.

About 35 years ago I started wondering and talking about privatizing SSI., making paments to the bank of your own choice but all that has been turned into mulch for now.

I still think my Grandpa had the right idea of a national sales tax and doing away with income taxes.

Russia prospers under the 10 percent straight rate income tax. The older I get the more I hate Kenesian economics.

Good one.

Yes, just give Me back all ... (Below threshold)
914:

Yes, just give Me back all I've paid in and let Me opt the f out.

As for the false public servant's aka politicians. They should pay in at double the rate which looking at my last deduction come's to about 6% or so. What a waste. If it was in my own account earning interest it would be ok but this pilfering of the masse's by the asse's has gone on way too long.

I pay in 6% so they pay 12%... (Below threshold)
914:

I pay in 6% so they pay 12% is what I meant.

SS was never inten... (Below threshold)
irongrampa:


SS was never intended to be the prime retirement source as it was originally structured. It's become the de facto retirement plan over the years, though. Too few have actually sat down and schemed out a viable retirement plan,imho.

It IS incumbent on all to plan for eventual retirement, and NOT on someone else's dime. We (wife and I) won our personal war on poverty a while back, we aren't rich, just nice and comfortable. It took a lotta work over many years to do, and SS never was intended as anything but an adjunct. Icing on the cake, if you will.

Young people today need to understand this, and the gov't should just get the hell out of the way and let them implement their OWN PRIVATE retirement plans. Otherwise, as I'm sure all here realize, disaster is looming.

914, Carr says he'll surren... (Below threshold)

914, Carr says he'll surrender all he's paid in -- it's part of the deal. He doesn't expect to ever collect it, so he's already written it off.

Quite frankly, for several reasons, I don't think I'll ever collect, either. And so do a lot of other people. So the write-off is pretty much an empty gesture in their eyes.

But as a rhetorical bargaining point, it's a tough one to refute.

J.

"Jay Tea will erase this... (Below threshold)
914:

"Jay Tea will erase this comment because he doesn't want you to know the truth"

Posted by: The nameless one


The comment will be erased because you are banned and have not apologized. As for truth. If you were about telling truth Wizblue would be growing by leaps and bounds instead of stinking up the trash bin it resides in.

I'd opt out in a heartbeat.... (Below threshold)
CDR M:

I'd opt out in a heartbeat. That 6% would just about cover every year's ROTH IRA contribution. I've yet to meet someone who opts for SS when offered the choice of you keeping your 6% and have it go into a retirement account of your choice or give 6% to SS.

I know I'll never collect a... (Below threshold)
hermie:

I know I'll never collect as the government has to find a way to keep me from collecting the funds which they don't have. In fact, I'm concerned about the Feds taking my 401K and IRA from me and 'allowing' me to have an 'annuity', which they also can't afford to pay out on.

I've been working for New Y... (Below threshold)
JJ:

I've been working for New York State forever years now and SS has NEVER been optional in all that time. Which states are optional?

oops, sorry, extra word up ... (Below threshold)
JJ:

oops, sorry, extra word up there

Federal employees do pay in... (Below threshold)
Mm:

Federal employees do pay into social security and have been since the retirement system changed to FERS. I also paid when I was active duty military. However given the chance I would opt out.

If members of Congress cont... (Below threshold)
TRex:

If members of Congress contribute into SS and federal employees do too what's the beef? And what's the reason for this article? That seems to shoot the writer's rant full of holes!

They contribute they just d... (Below threshold)
hcddbz:

They contribute they just do not collect since their Pensions are can be up to 70% of their pay and full medical and Dental.

Both of my kids have their ... (Below threshold)
GarandFan:

Both of my kids have their own retirement plan. Both realize that they're being hosed by Social Security and will never see a dime when they do retire. If Barry was really interested in "social justice", he might want to look into what, under other circumstances, would be called THEFT.

Jay Tea:I don't kn... (Below threshold)
Captain Ned Author Profile Page:

Jay Tea:

I don't know how things are in your state (I always get confused over which one of you is in which state; I think you're next door in Cow Hampshire), but the claim that state-level employees are exempt from Social Security does not hold here in VT. I'm a state employee and I dutifully pay my 7.65% every paycheck. I also believe I'll never see one red cent from SS as the age cohorts behind me are even smaller and cannot support the wealth transfer that SS has become.

Do I have a defined-benefit plan? Yes. To max out my benefits under the plan I must serve at least 30 years and my age plus years of service must be greater than 87 [/handwave, as it changes regularly]. For that I currently get 50% of the average of my last 3 years with annual adjustments at 50% of CPI. I'm glad to have the defined-benefit plan, but to lump my plan in with the gold-plated stuff we've seen lately is to me an insult. Also, just as in the case of Social Security, I'm pretty convinced that the Baby Boomer retirements will so drain the pension assets that I'll never see the benefits I was "promised" (don't get me started on state union crap; those people are idiots).

I'm paid fairly for what I do (financial regulator). If I moved to one of the Federal agencies I could immediately see a 40% pay increase. To do so I would have to uproot my family and commit to travel over the entire US rather than just within VT and I'm not willing to do that, even though I'd get the Federal pay and the Federal retirement plans.

State employees don't have ... (Below threshold)
Jim Addison:

State employees don't have the option, it's the states which can opt them out.

Given the practical impossibility of several states being able to meet those pension obligations, you might think they would rather opt in.

Excuse me? Precisely where... (Below threshold)
Arkay:

Excuse me? Precisely where did you get that dead wrong statement about federal employees begin able to opt out of SS? I just retired from federal civil service and it was NOT optional.




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