Guest Editorial

Steve Swedberg

Retirement seems so far away, so why even mention Social Security? I mean, the government has our best interests at heart and there will be Social Security in the future, so you can safely presume that my writing this article seems futile.
But that’s where you’re wrong, because in this case the government does not have our best interests at heart, particularly those of our generation. Maybe you have been lulled into a false sense of security, but I’m here to tell you that the system is broken and if we don’t do something about it soon, there will be nothing left for us.
Although you might hear that we can postpone action, in reality, we only have until 2017, because at that point we start to hit deficit spending. The government would then do one of two things: raise taxes or lower benefits.
Raising taxes won’t work because Social Security taxes have already been raised forty times and the problem has yet to be resolved. Decreasing benefits won’t work because this will cause the poverty rate of seniors to double.
Neither one of those ideas sound really pleasant, and letting an increasingly deteriorating system retain its status quo is also an unattractive option. So, let me give you an option that will not only avoid putting our government in over $12 trillion of debt, but also give our generation retirement money: Personal Retirement Accounts.
What PRAs would do is divert a third of our Social Security taxes into a diversified portfolio of low-risk stocks and bonds. Some might say that investing in the stock market is risky because things such as the Great Depression might reoccur.
If you would have invested in the stock market in 1895 and would have cashed out in 1932, which was the low point of the Great Depression, you would have still received a four percent return rate. Without an economic disaster, your return rate would be double.
But with the current system, you’d be lucky if you received a positive return rate – or money, for that matter. Furthermore, this won’t hurt the older generation because anyone over 55 is already eligible to receive benefits. This is not about angering the elderly or giving the little guy the raw end of the deal. It’s about choice, stability, economic liberties, and most importantly, giving our generation a piece of the pie.
I hope that at the end of this, you think to yourself, “Hmmm, maybe we should have PRAs,” because if you’re like anybody else, I’m sure you don’t like getting the shaft.

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