By James Schaefer.
The existence of the Alternate Plan, which substitutes for Social Security in three Texas counties, is proof that Social Security has collected sufficient FICA revenue over the decades to keep the system solvent (Perry Is Right; There Is a Texas Model for Fixing Social Security, Wall Street Journal, September 24-25, 2011):
“Those who retire under the Texas counties’ Alternate Plan do much better than those on Social Security. According to First Financial’s calculations, based on 40 years of contributions:
• A lower-middle income worker making about $26,000 at retirement would get about $1,007 a month under Social Security, but $1,826 under the Alternate Plan.
• A middle-income worker making $51,200 would get about $1,540 monthly from Social Security, but $3,600 from the banking model.
• And a high-income worker who maxed out on his Social Security contribution every year would receive about $2,500 a month from Social Security versus $5,000 to $6,000 a month from the Alternate Plan.”
Indeed, our Social Security System has collected enough to fund a far more comfortable retirement for all Americans than the current system will provide, had the Social Security Trust Fund simply been handled differently. Instead, after being put into U.S. Treasury bonds, it was promptly spent on other government programs.
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The great disappointment is that, by an act of Congress, the Alternative Plan is available only to public employees, and not to private citizens. This constitutes unequal treatment before the law.
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