The third major reform proposal consists of investing the Social Security tax in the stock market. The biggest question for this type of reform is whether taxpayers would decide where to invest there tax money or would the government choose for them. An individual on this type of plan would be required to invest a portion of there income in stocks, bonds, mutual funds, bank CDs, but not in gambling or other wild money making schemes. The tax payer on this type of program would then be able to withdraw their investments once there reach retirement age. The government would also insure that the retire still receive a minimum return even if their investments fail. The biggest advantage of this IRA style approach would be that Americans will finally be in control of their own retirement fund. This proposal has many advantages for politicians and voters of all ages. There would no longer be debates about retirement ages and you could make your own choice on when to retire. The debates on the how to measure the rate of inflation with the CPI to would no longer affect benefit payments. The stock market could flourish from the added revenue of future retirees. The increase in investing also could improve the state of the American economy. There are a few drawbacks for this type of reform. The biggest is deciding how to finance Social Security for people retiring before this reform, since Social Security is run as a pay as you go system. Social Security is considered a pay as you go system because people paying Social Security now are paying for the already retired citizens. Financing the retirement for people before the reform isn’t a proble, since the baby boomer generation is creating a $50 billion a year surplus. The baby boomer generation has also created a $500 billion surplus from recent years which will be enough to finance the their retirements. The other option is for the government to invest Social Security trust funds in the stock market. The advantage of this is that if market trends continue the government will generate gain an additional after inflation interest rate of about 7%. Although this option has many problems that will keep it from being a solution. This option would give the government a massive control of the private economy. It is hard to believe that the government will be able to keep a hands off approach when it controls huge blocks of stock in companies. The American public doesn’t have enough faith in the government to trust that it will be able to invest such a large sum of money without being swayed by political pressures. The new demand for the stocks will decrease the demand for bonds thus raising bond interest rates which could hurt the economy. This approach also doesn’t have a plan of action for slumps in today’s volatile market.

tically change the Social Security Payroll Tax. Another proposal is to change amount of benefits of the provided by Social Security. A third reform proposal includes investing Social Security money in stocks either by the government investing the money or by setting up mandatory IRA investing. Another major development in the future of Social Security is the recent proposals made by President Clinton’s Advisory Committee on Social Security. In January of this year the Advisory Committee on Soci

Some topics in this essay:
Social Security, Social Security’s, social security, Security American, Franklin Roosevelt, Social Securities, Americans Currently, Security Shortly, York Dem, Advisory Council, social security tax, security tax, stock market, Payroll Tax, amount benefits, savings accounts, retirement age, payroll tax, investing stock market, pay system, investing stock, tax invested, amount benefits paid, investing social security, support social security,