Thursday, March 6, 2008

Obama's Social security Solution

With some bumps in the road our economy has grown for the last 25 years.

Even the recessions we have had have been minor when compared to the historical economic cycle of boom /bust.

One of the biggest reasons for this is not tax cuts or other economic policies. It is because the creation of IRA's, 401 k accounts and other similar vehicles that opened up investment opportunities to the average Joe. This has done two things, created wealth on an unprecedented scale and increased the capital available for businesses to expand.

It actually does the opposite of Social Security which removes capital from the economy because current funds are not invested for future use but instead replaces income of people not working.

This is not only the fundamental flaw in social Security that will cause it to crash but it is actually bad for the economy.

This is why Obama's plan to Save Social Security will be a disaster for the US economy.

He will raise the earnings cap on Social Security taxes which will result in the middle and wealthy classes paying more into Social Security, thereby removing capital available for investment from the economy. It is the exact opposite of what should be done.

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