My thoughts on the US Debt and Social Security?..
A ?fix? for both.
United States Deficit Bonds. Very similar to the War bonds sold for WWII with a longer duration.
Bear with me ? just trying to flesh out this idea and any thoughts are appreciated. I was thinking about this late last night and failed to write down my thoughts as I had them.
War bonds were sold for $18.75 and matured in 10 years and at maturation, you received $25.
My thoughts are this:
A person, age 25, would purchase a 40 year United States Deficit Bond. The purchase price would go against the deficit. The bond would mature at age 65. The bonds would have to be a zero coupon bond, meaning there would be no annual coupon payments - if they bought a zero coupon bond at $1000, it would mature in 40 years at $10000 (arbitrary number ? would have to figure this out) Or, there could be bi-annual interest payments that would be put into an IRA-type fund
The following year, the same person, now age 26, would buy a 39 year United States Deficit Bond. The amount that the person would purchase would be equal to what their yearly contribution to Social Security would have been. To keep the social security system solvent, employers would continue to pay their portion of the worker?s Social Security into the system but would receive a tax credit for doing so. Also, the maximum cap on contributions for salaries would be removed.
There would have to be an age limit set for who would still receive benefits from the old SS system and who would only receive money from the bond system. The age for maturation of the bonds would have to be set ? I used 65 as a retirement age. The bond maturation dates could also vary so the retiree would have bonds maturing every year during their retirement.
This would not ?solve? the US deficit problem but it would have the debt be held by Americans rather than foreign countries. It would also remove the SS payments from the General Fund ? not allowing Congress to spend the money for other programs. I would imagine that Congress would want the zero coupon bond as they would not want to have to fund the IRA?s on a biannual basis as that would further remove $ from their hands.
Just a rambling thought I had last night ? thought I would share and perhaps we could improve on the idea.
A ?fix? for both.
United States Deficit Bonds. Very similar to the War bonds sold for WWII with a longer duration.
Bear with me ? just trying to flesh out this idea and any thoughts are appreciated. I was thinking about this late last night and failed to write down my thoughts as I had them.
War bonds were sold for $18.75 and matured in 10 years and at maturation, you received $25.
My thoughts are this:
A person, age 25, would purchase a 40 year United States Deficit Bond. The purchase price would go against the deficit. The bond would mature at age 65. The bonds would have to be a zero coupon bond, meaning there would be no annual coupon payments - if they bought a zero coupon bond at $1000, it would mature in 40 years at $10000 (arbitrary number ? would have to figure this out) Or, there could be bi-annual interest payments that would be put into an IRA-type fund
The following year, the same person, now age 26, would buy a 39 year United States Deficit Bond. The amount that the person would purchase would be equal to what their yearly contribution to Social Security would have been. To keep the social security system solvent, employers would continue to pay their portion of the worker?s Social Security into the system but would receive a tax credit for doing so. Also, the maximum cap on contributions for salaries would be removed.
There would have to be an age limit set for who would still receive benefits from the old SS system and who would only receive money from the bond system. The age for maturation of the bonds would have to be set ? I used 65 as a retirement age. The bond maturation dates could also vary so the retiree would have bonds maturing every year during their retirement.
This would not ?solve? the US deficit problem but it would have the debt be held by Americans rather than foreign countries. It would also remove the SS payments from the General Fund ? not allowing Congress to spend the money for other programs. I would imagine that Congress would want the zero coupon bond as they would not want to have to fund the IRA?s on a biannual basis as that would further remove $ from their hands.
Just a rambling thought I had last night ? thought I would share and perhaps we could improve on the idea.