To make the U.S. Federal Budget sustainable for the long term, it’s possible that improving social security could help, but any modification to social security is a touchy subject, because promises were made and it would be dishonest to break them.
So, the first step to the reform is making it apply only to people born after a certain date, that have not yet paid social security tax.
Next, we take each person in the reform group and they get set up with a Treasury Direct Account. All of their social security taxes go to their own Account, and they are used to buy inflation protected bonds. The money used to buy the bonds goes to help pay the social security debt owed to the people in the legacy system, and after they are all gone, those funds go towards paying interest on other I bonds in the new system. The account holders can contribute additional funds to their Treasury Direct Accounts up to $20,000 per year. Those funds are not removable until retirement. In the event of death, the outstanding bonds in these accounts are distributed to the Treasury Direct accounts of inheritors specified by the deceased without tax.
When any of these bonds in the Account mature, the Account owner can decide to reinvest them in any treasuries that they want, or the matured bonds can be used to purchase real estate, in which case, the Account owns the real estate and the Account holder makes mortgage payments through the Account. In the event of default on the mortgage, the lender can still foreclose upon the property and that value is lost from the Account. But, if someone successfully pays off their house, then they can pass it on to inheritors’ Accounts tax free.
Finally, these Accounts should have similar legal liability protections as are enjoyed by 401ks or IRAs.
The purpose of all of this is to get everyone set up with a Treasury Direct Account so that they have an easy and advantageous means to invest more in treasury securities (which means more domestic ownership of The National Debt), and make social security more transparent and visible to future generations. The big advantage is that people can use these accounts to purchase and hold real estate. That aspect really makes it valuable to the people to be investing in Treasuries.
