I am not going to rehearse with you the fact that the so called “Trust Fund, hasn’t anything in it but government bonds, and nothing of actual value, other than the “Full faith and credit of the US government,” whatever that is. In other words, the Social Security trust fund is a sham, just like printing press money of all kinds. So here is a bit of original thought if you please, as to how to “fix” it once and for all, and at the same time give it actual value. (Of course it will never happen).
Forget about Dubya’s and other’s efforts at raising taxes, lowering benefits, or some other hocus pocus. It is an actuarially unsound idea from the beginning, 70 years ago. So here’s what should be done. For those who want to really insure their futures, and leave something to their kids, on a purely voluntary basis of course, let their deductions of however much of them they may choose, be used to buy gold and silver. Not ordinary gold and silver, but a one ounce or fraction thereof, to actually buy physical gold and silver, and give it to the person. The compulsory deductions remain. Follow my idea.
The treasury will make special “Social Security” gold and silver coins, with the retirement age, to the month and year of the buyer. In other words, suppose a 32 year old worker, wants his Social Security deductions to be placed directly into gold and silver. His birthday, at age 62 will be February, 2034. The amount deducted, would be used to buy from the US Mint at West Point New York, the amount desired, in the special “Social Security gold and silver coinage,” with the exact month and year of his achieving age 62 on them, and they cannot be sold until then. It would be illegal for anyone to buy them, or for the worker to sell them. The date would be the date they could be sold or not sold, and not before. If the retiree, at age 62, was well off enough, so as not to need it, he could pass them on to his kids as part of their inheritance, with no inheritance taxes.
If, at age 62, the retiree needed money, in whatever currency was then being used, he could sell a few, or even one, and get funds to pay his or her bills. They would be virtually impossible to be sold before their time arrived, because of the date. The worker would then hold his retirement fund in his or her own hands, if they chose, and place them in a safe place. If they trusted government, they could allow it to hold the gold and silver for them. I wouldn’t, because I don’t trust government. No reliable person would buy them, because with the retirement date on it, they would not be negotiable.
So here’s a worker at age 32 or 42 or 22, allotting part, or even all of his Social Security deductions, to be placed into physical gold and silver, with his retirement date minted on the coins. The coins would not be negotiable until the date is achieved, and his retirement savings would be in his own hands, and no trust of government would be necessary. The mint would turn out newly dated coins every month, to be handed over to the investor, and all would have his or her retirement date minted on them, and not be negotiable until then.
The buck is on the skids, and in another 20 years, it may not even exist. The euro, and all other pieces of paper with ink on them, may cease to exist and be replaced with other pieces of paper with ink on them, for all we know. It doesn’t matter! The worker’s retirement date is an integral part of the coin, along with its weight in .999 or .9999 pure gold or silver. Out of dollars each payday, and into gold and silver, which is in the worker’s own hot little hands. Have gold and silver ever ceased to be real money, regardless of the paper currencies in existence? No. If the dollar expired in 2010, when a candy bar went for $10 million, and a new currency was foisted upon the citizenry, called the “liberty” or other name, would the retirees’ savings be in jeopardy? Nope, because his retirement wasn’t denominated in dollars or liberties, but in ounces of real money.
If a worker tried to sell his retirement gold and silver, who would buy it? I wouldn’t, because it wouldn’t be negotiable. If some unscrupulous people did buy it, they would have to either re-sell it or melt it down, and if it were melted, it would have a bad hallmark or none, and no one would buy it, so it would be a poor investment. There are cheats and unscrupulous people in all fields, and this might be no exception, but it would be a poor risk, with a date of negotiation as part of the coins or bars. Would you buy a dated object, if the date it could be used was far in advance? Not me.
To re-iterate then: A worker decided that $100 a month of his Social Security deduction were to go into gold or silver. That amount would not go into a fictitious trust fund, but to the mint, where his retirement date would be cast or minted into whatever he got for his $100, at the then current price for gold and silver. Maybe he’d get 12 Silver Eagles with his retirement date as part of them. Maybe he’d collect his deductions for 6 months, and get a gold coin with his retirement date minted on it. It would be purely voluntary on the part of the worker. Workers, or for that matter self employed people, could stay in the Social Security dollar system, or they could take their savings out every payday in tangible assets, which they could hold and store for their retirement. If they decided to eliminate all part of the government retirement system, and who could blame them, the government would not be obligated to them in any way in the future. The deductions would instantly be spent on gold and silver, which would not be negotiable till retirement age.
If the worker died before age 62, the silver and gold would still be in his possession, and could go to his widow or descendents, with no tax liabilities. As it is now, if a worker dies before age 62, all that input is lost. If government wants to legislate to protect you from your own self, as it does with laws against drugs and prostitution, they do it also with the Social Security system, which protects you from your own folly, supposedly. The Social Security system is bankrupt, and dishes out failing dollars. If my Social Security plan were adopted, with savings instantly in gold and silver coins, with retirement dates minted on each one, millions probably would opt out of the system, relieving it of future debts. The government would be force feeding a retirement plan to everyone, as they do now, but with the option of doing it in non-future liability gold and silver.
Naturally, as dollars fail, gold and silver will go up, but at whatever price it is when the deductions are placed in it, that will be the purchase price of the coins, physically issued and given to the future retirees. The government owns its own mint, so neither myself nor any other precious metals dealer would be involved in any way, other than possibly buying the stuff at maturity date if selling were desired. Prices of gold and silver going up in failing dollars, is normal and to be expected, but think of the riches at retirement, for say a 20 year old, when the whole thing may be ashes anyway, and dollars no longer in existence. The partaker of the gold and silver Social Security deduction system, would have physical possession of their retirement, and watch it grow every week or month. Talk about security!
Imagine it also this way: This would be a sort of method of getting back to at least a pseudo-gold standard. If millions of workers were saving in real money, rather than paper scrip, this relieves government of all future responsibility, other than the initial reception of the deductions and transference to the mint. Imagine that if more and more did it, not only would the prices of gold and silver go up, but government’s responsibility for unmet promises would be relieved. For those who have paid into it already, and who want to change, why not allow all they have already paid in, as well as future deductions, to be placed in gold and silver, and government relieved of all future payments? Maybe everyone would opt out, and the Social Security system simply go out of business, with everyone eventually going into instant gold and silver. Worse things could happen!
Government then, would still be forcing everyone to save, but in their choice of paper scrip or real money. Currently, there is no choice. If it were placed in stocks or bonds, as Dubya wants, it is a bad idea. After the 1929 crash, it took 25 years for the Dow to get back where it was before the crash. Bonds are denominated in dollars, which is a terrible idea also. Actually, my idea will save the system, and protect the workers with a true, solid, historically valuable savings device, in real money, not paper scrip at the whim of an untrustworthy central government with its tied in private central bank. Protect yourself.