Social Security – A Story of Five Frogs on a Log

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Robert Brescia
October 31, 2022

“Five frogs are sitting on a log. Four decide to jump off. How many are left? Answer: five. Why? Because there’s a difference between deciding and doing.” – MARK L. FELDMAN and MICHAEL F. SPRATT

American businessmen

The “Five Frogs on a Log” saying appeared in the House Select Committee’s Final Report on Hurricane Katrina, entitled “A Failure of Initiative.” I thought I might apply it to this current discussion on Social Security (SS) because it seems to me that there is considerable pontificating and bloviating about this aging system but no action. Perhaps it is that way because no politician wants to go near it—could be toxic. After all, the majority of Social Security recipients are elderly, and we know very well that the elderly vote actively. They are not Nixon’s Silent Majority—they get out there and vote.

The Good.

Recently, the government decided to implement an 8.7 percent rise in SS benefit amounts—the highest jump in decades. As many Americans were jumping for joy, the Consumer Price Index (CPI) was announced and it was 8.2 percent. Basically, almost all of the SS increase was wiped out by higher market-basket prices and inflation. Nevertheless, the SS Cost of Living Adjustment (COLA) was a welcome sight in the face of frighteningly higher prices. Americans love their Social Security benefits and will do almost anything to preserve and protect them. It seemed like such a great idea in 1935 when President Roosevelt and the Congress ushered in a bevy of social programs designed to accommodate Americans from cradle to grave. Like most ideas and programs however, SS has an effective life cycle and the time has come for significant changes.

The Bad.

Social Security monies are collected and invested through U.S. Government securities. Social Security retirement age is changing. This means that to obtain the same retirement payments, there will be an older Social Security full retirement age, a bigger reduction if you claim SS benefits early and less of a benefit for delaying claiming Social Security. Bottom line: If you’re 45 to 60 years old, you should plan on benefit reductions of about 5 percent. If you are younger, plan on a 10 percent to 15 percent benefits cut. People are living longer, working longer and waiting longer for less benefits. Not everyone agrees with the “living longer” part—the Centers for Disease Control and Prevention (CDC) published a 2021 report that asserts a decline of one year in U.S. life expectancy. This is a trend, says the CDC, and it has nothing to do with COVID.

The Ugly.

Economists generally agree that the SS fund will run out of money somewhere around the year 2034. Therefore, politicians could be content to just kick the SS can down the road. The sad truth is that because the American monetary policy and financial strategies do not favor savings and investments, Americans are entering their golden years nearly penniless. Poor governmental decisions and congressional over-spending have left the stock market in tatters. Americans continue to borrow and spend with minimal attention to retirement. Consequently, many are depending on the government’s SS program to take care of them.

“Don’t find a fault – find a remedy!” Henry Ford – automobile manufacturer.

What lies ahead?

A British think tank is recommending that the United Kingdom bump the official retirement age up to 75. France, on the other hand, went down to age 62. In the United States, Full Retirement Age (FRA)—the age at which you can get 100 percent of the SS calculated benefit has already increased from 65 years old to 66 and 4 months and will rise over the next several years to 67. Due to increases in Social Security’s Delayed Retirement Credit, the effective retirement age is now 70, with monthly benefits reduced for earlier claiming.

I propose to replace the almost century old SS system with a much bolder one. My plan would comprise a public-private partnership where the government and the individual have skin in the game—equal stakeholders. SS savings accounts would be established that are tied individually to each citizen. Pre-tax contributions could be made by account holders through their employers. Withholdings would continue to be made, also through employers. A matching process would be put into place where the government would then match the account holder’s SS savings contributions. A table of percentages and caps would be established. Such a system would ensure mutual responsibility for solvency when American citizens age. It would be less of a burden on the government and provide incentive for citizens to contribute as much as they can. There are no details in this short article but I believe the idea is worth analysis. I hope and pray that politicians think so too—and jump off of that log.

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Author: Dr. Robert Brescia respects the wisdom of generations, promotes the love of learning, teaches ethics to university students, government & politics to AP seniors, and leadership to organizations. He is a candidate for National Board for Certification of Teachers (NBCT) at Stanford University. The Governor of Texas appointed him to the State Board for Educator Certification (SBEC). Bob has a doctoral degree with distinction in Executive Leadership from The George Washington University. Contact him at [email protected] or on Twitter at @Robert_Brescia.

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