Our Social Security system has problems because it is conceived of as an annuity, a trust fund but does not actually operate as one. The surpluses shown just flow into the general tax base. They are not independently invested. As shown, for most of its history it has generated rather massive surpluses—whereas the German system, based on an annual focus, has not. It seems to me that social security reformers in this country might examine at least two alternatives—a system like Germany’s or a true trust fund approach where our Social Security Administration also becomes an independent, self-administered corporation with oversight by, say, the Department of Labor.
In actual fact, Social Security here is much better off, much more solvent, and today uses zero percent tax revenues. Yet here we wring our hands and have coniption fits over Social Security whereas in Germany, where contributions only cover only 75 percent of costs, they are happy as clams with their system. Go figure!
” German Pension Insurance « LaMarotte