Reforming Social Security For the Sake of Women and Minorities

I am very excited that my new favorite presidential candidate has listed as platform issue #2 to "Transform the Social Security system into personal savings accounts that will enable every worker to have higher retirement incomes from their own work and avoid the need for financial support from their children. " There is probably not a single issue that disgusted me more over the past two years than the despicable way Congress handled the prospect of reforming the Social Security system. When the Democrats gathered around the statue of President Franklin Roosevelt to fight reform and collectively stuck their heads in the sand, they compromised the future of millions of Americans, particularly women and minorities. It was a disgraceful act of stewardship towards the rights and freedoms of those they supposedly champion.

The bipartisan presidential commission that sought out ways to improve the current system, that without change is inevitably headed towards economic insolvency, clearly espoused how a change to private accounts would most benefit these groups that are often economically disadvantaged. The democrats, however, were more intent on a political victory afforded by stopping a Bush initiative to implement these plans than on realizing the benefits that would accrue to these groups.

The main reason it hurts African-Americans so much is because of the significantly lower life expectancy for the group. Let's say for instance that you have someone earning $25,000 a year from age 21 but then passes away at age 61. (For the sake of ease, I will assume no increases in salary). If that person is allowed to contribute even 2% of his salary (of the 6% FICA tax) into a personal account and earn 10% (the stock market has averaged between 10% and 11% since 1929), he or she will have accumulated over $220,000. Under the current system, the family would receive nothing. Under the reformed system, the family could use that $220,000 to help the family purchase a home or send grandchildren to college. Which system do you think is better?