Social Insurance

Social insurance, the idea of government provided insurance, has its roots in the era of FDR and the New Deal of the 1930s where Social Security was developed.  It has been a controversial topic in today's political field and probably always will be.  One of the biggest debates is about the trust fund for the baby boomer generation.  This fund is about $3 trillion and will disperse from 2011 to 2030.  The idea behind it is to cover social security benefits for the generation born between 1946 and 1964 in which there was a substantial increase in births during that period.  After that, it will go back to a pay-as-you-go system.  The idea that social security is bankrupt is misleading.  However, given the fact that people are working longer and are less likely to retire at age 65 presents a problem for future beneficiaries.  This has led to the increase in "retirement age" to 67 for the generation of people in their early 20s.  If social security isn't to change to adjust to the health of individuals then it will certainly go bankrupt as later generations are likely to outlive the funds paid into social security.  

I think that social security should be gradually depleted OR an opt-out option should be available at some age.  What age that should be could be up for debate, but, my initial thought is at age 25.  At that age, I feel that an individual should be allowed to opt out of paying for social security.  That age could help alleviate the transition problem as well.  However, the counter-argument is that most would probably opt-out so they could keep the extra money and this won't create a strong enough incentive to open their own retirement account, especially those in poverty.  So this could lead to an increase in funding for welfare expenditures.