(a proven solution already exists)

A lot has been said over the past 2-3 decades about problems in the Social Security System and it was once again used as an issue in the 2004 elections. The Democrats used the idea of a privatized system as an issue against the Republicans.

Unfortunately not enough people know that an example of a privatized system already exists. From its beginning in 1935 the Social Security Act of 1935 included a provision that allowed municipal employees to opt-out of the system in favor of a privatized system. In 1981 the municipal employees of three counties in Texas voted to do just that before Congress closed the loop hole that made that possible.

The key point is that those employees now mandatorily contribute to their privatized system almost exactly the same amount of their income as they would have contributed to the Social Security System. The thing that is so telling about the failure of the Social Security System when compared to a privatized system is that when they retire those Texas municipal employees have a monthly income that is almost exactly 400% greater than they would have had if they had stayed in the Social Security System. Not only that but their retirement account funds also become part of their estates to be passed on to their heirs when they die, a situation that does not exist under Social Security.

Further, their retirement account fund is a private fund and its assets are invested in stocks and bonds in the marketplace which accounts for the greater income upon their retirement. It also helps the economy for everyone else. Neither of those situations exist with the Social Security System.

Before everyone could be offered the option of participating in the Social Security System or a privatized system those Senior Citizens already in the Social Security system and near retirement must be assured they won't be left with nothing. That is a covenant made between the government and those who have contributed to the system for a lifetime and it should be honored. I suggest that those who elect to use a privatized system be required to continue to contribute to the Social Security System but at a slowly decreasing rate until those citizens currently in the system, and who choose to remain in the system, have passed away. At that time those citizens who chose the privatized retirement system would have no further obligation to the Social Security System.