How Bill Clinton Almost Saved Social Security (and lessons we can learn to prevent disaster)

How Bill Clinton Almost Saved Social Security (and lessons we can learn to prevent disaster)

The Third Option

Let’s talk about the third option to save Social Security that NO ONE is talking about. It was almost used in the late 90s and if it would have been implemented, we wouldn’t have ANY ISSUES WITH THE SOLVENCY OF SOCIAL SECURITY TODAY. But it may not be too late…we’re covering this and more so keep reading. 

Over the past 10 years or so there’s been something that been repeated over and over about solving the issues with Social Security’s shortfall that looks like it will happen in 2034. That is if the solution will involve either a tax increase or benefit cut and probably a combination of the two.

However, there is a third option that’s rarely discussed. In fact, its become a bit of a third rail. If yo touch it your political career may be over and that is to invest part of the assets in the trust fund. The quick snapshot is that there is a 2.9 trillion dollar reserve balanace that’s earning a measly 2.7%.

This is truly ridiculous. If I got my clients those returns year after year, they would fire me! Since the worker to retiree ratio is getting skewed (more retirees than workers can pay for) there is an increasing reliance on the interest generated by the trust fund assets. Obviously if we have to start taking money out of the trust fund, it will have a lower balance and thus can’t earn as much interest. If we could increase the interest rate now, there may not even be a need to dip into the reserves. The interest alone may be enough. 

Quickie Short Review of the Clintons

Let me give you some reasons this hasn’t happened yet. Back in 2016, when Senator Hillary Clinton was running for President, she had different ideas about how to save social security. But ironically, it was her husband, President Bill Clinton, who actually proposed this.

During the late 90’s he had a study group that suggested multiple fixes for SS. The one he really liked? Invest part of the SS trust fund. This made perfect sense! In multiple academic papers that followed it was found that the deficit would be closed completely by doing this.

The Blue Dress

But then something happened that stopped everything. Monica Lewinsky and her blue dress. At this point President Clinton was forced to align with his party and abandon his dream of putting safeguards in place that would protect Social Security and Medicare for the long term. 

How Bill Clinton Almost Saved Social Security (and lessons we can learn to prevent disaster)

In retrospective data a paper from the Boston College’s Center for Retirement Research illustrate that this plan would have been effective, and we would not be in the place where we are today. In this same report they say that investing the trust fund would still fix the issue. At the same time, reports from the SSA say that it wouldn’t have much of an impact this late in the game. So there’s some disagreement there about whether or not this will work at this point. After all, the time value of money needs TIME to work and we’re waiting until the 11th hour to get something done. 

My Perspective

So let me tell you where I stand. I’m a conservative and find most of my views to align with our conservative legislators. However, no one gets a blank check for my approval.

Even though I have comments on my YouTube videos saying I’m a flaming liberal, and other comments on the same video saying I’m a crazy right winger I think that I have a responsibility to support the legislation that makes sense… even if it is from the ‘other’ party. But Everything is framed as good or bad, liberal or conservative, black and white.  We’ve gotten to a point where we feel bad for agreeing with a proposal from a party we don’t like and feel like we have to agree with everything our chosen party likes. There is an in-between here. And unless we find it, were going to have a disaster on our hands with Social Security.

If we keep waiting the only way to fix it will be drastic benefit cuts or tax increases. Increased taxes on the rich do not create ANYTHING! Instead, the often-unintended consequence is of targeting rich people with more taxes will be a BIGGER gap between the rich and the poor. This is because companies, who are more often than not owned by rich people, are not likely to take a reduction to their net profit or pay. Instead, the increased costs of higher taxes get passed on to employees through pay and benefit cuts.  

It’s your retirement!

Before we go I want to thank you for taking the time to get informed. So many people just float into retirement hoping everything will work out. Sometimes it does, but sometimes a lack of planning can ruin what should be your best years. This is your retirement! Please continue to stay informed! 

I’d recommend staying connected with my content so you won’t miss anything. In many cases I’ll publish my newest stuff on YouTube and then share it on my Facebook page. Then my content team does their magic and cleans it up into an article for those who enjoy reading. (Again…the article is shared on my Facebook page.)

Be sure to subscribe to my site so you won’t miss any of the new content coming out, plus you will receive the blueprint version of my book for free. Alternatively, you can just head over to Amazon and buy the full version. I can’t guarantee this, but I’m pretty sure you’ll get more value than the $12 it costs.

Thanks for reading…have a great day. 

Leave a Reply

avatar
  Subscribe  
Notify of