As for Social Security, a basic reform would let younger people have personal Social Security accounts.
Gingrich said Sunday that he thinks Romney will adopt some of the positions that he's advocated: energy independence, personal Social Security accounts, keeping the government from trying to impose itself on religious values and paying down the debt.
Gingrich said Sunday that he thinks Romney will adopt some of the positions that he's advocated -- energy independence, personal Social Security accounts -- the "Chilean model" that he has pushed -- keeping the government from trying to impose itself on religious values and paying down the debt.
The main reason Social Security personal accounts were on the agenda in 2005 is that the Cato Institute has been promoting the idea since at least 1980.
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With this approach, because standard, long term, market investment returns are so much higher than the implicit returns paid by completely noninvested, pay-as-you-go Social Security, all workers who exercise the personal accounts would receive more in benefits through the personal accounts earning standard long term returns than the Social Security benefits they replace.
The Chief Actuary of Social Security has scored several personal account bills as eliminating all future Social Security deficits entirely through such personal accounts alone.
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President George W. Bush campaigned on personal accounts for Social Security quite effectively in 2000, less so in 2004.
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Any plan for personal accounts for Social Security involves a transition financing issue.
In the process, the transition to the personal accounts for Social Security is fully paid for, effectively by the spending reductions.
As discussed last week, Rep. Thaddeus McCotter recently introduced a very well developed, advanced plan for personal accounts for Social Security.
FORBES: The New Republican Vision For Modern Social Safety Nets
That legislation includes personal accounts for Social Security, fundamental reform of Medicare and Medicaid, general health care reform, tax reform, and other budget reforms.
His first-term commission on Social Security recommended that workers, if they so chose, could put up to 2% of their Social Security taxes into personal accounts.
When the Chief Actuary of Social Security in the U.S. scored the similar Ryan Sununu bill, he concluded the personal accounts offered such a clearly better deal than Social Security that he assumed all workers would choose the accounts.
Mr McCain wants workers to have personal investment accounts as part of Social Security but hasn't explained how to make the overall programme solvent.
The Bush Administration will probably propose, as it has in the past, allowing workers to allocate a small portion of their Social Security tax to their own personal savings accounts.
He explained that with the personal accounts, he was modernizing Social Security for a better future.
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Each worker would be perfectly free to choose to stay with Social Security as is and forgo the personal accounts entirely.
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So, in this ideal retirement scheme, Americans would respond to the prospect of a diminishing Social Security stipend by initiating or enhancing personal accounts.
Workers could be allowed to save and invest what they and their employers would otherwise pay into Social Security in personal savings, investment and insurance accounts.
But three neighboring Texas counties, which opted out of Social Security 30 years ago by creating personal retirement accounts, have avoided a fiscal train wreck while providing retirees with even more retirement income.
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The real world systems offering personal accounts as an alternative to Social Security all suffered some losses in the financial crisis, but none of them failed and most of the losses have since been recovered, with workers continuing to enjoy far greater long term returns and benefits from the fully funded and invested personal accounts.
FORBES: Social Security Personal Accounts And The Financial Crisis
Those include beginning and expanding an option for personal savings, investment and insurance accounts for Social Security and Medicare, eventually expanded to finance all the benefits financed by the payroll tax today.
In retirement, benefits payable from the personal accounts would substitute for a portion of Social Security benefits based on the degree to which workers exercised the account option over their careers.
The new consensus began with Rep. Paul Ryan introducing bills in 2004 and 2005 providing workers with the option to choose personal savings and investment accounts to finance their future Social Security benefits.
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But the personal accounts will pay more than the amount of Social Security benefits they replace, leaving the retiree with higher benefits overall on net.
FORBES: Social Security Personal Accounts Are A Path To Prosperity
Yet, at the same time, the real long-term returns on market savings and investment earned through the personal accounts will pay retirees much higher benefits than Social Security even promises, let alone what it can pay.
In these circumstances, I believe it makes good political sense to keep it simple and just guarantee that no worker with personal accounts will get less in total benefits than Social Security promises today, rather than try to defend a complicated, more limited guarantee.
That is because the personal accounts rely on real savings and investment, while Social Security involves no savings and investment, but just all tax and redistribution.
That is because the personal accounts finance so much of the future benefits of Social Security that future deficits between continuing payroll tax revenues and continuing benefit obligations of the program are eliminated entirely.
FORBES: Social Security Personal Accounts Are A Path To Prosperity
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