The Social Security system is merely a Ponzi Scheme - one that hurts poor people most.
First, it's the biggest tax poor people pay - bigger than the income tax (which many do not pay, because they earn so little; Bush's rax cut exempted more poor people from paying any taxes - this is why rich people pay a GREATER share of federal revenue now, than before).
Second; poor people generally start work at an earlier age and die younger than rich people. Especially poor minorities. So they end up paying more into the Social Security "Trust Fund" (so-called) and taking less out. And since - under the current system - the benefit is not transferable to heirs, all that "input" - the lifetime of payroll taxes - goes back into the system.
POOR PEOPLE ARE GETTING SCREWED BY SOCIAL SECURITY. Social Secuirty is a collossal rip-off of poor people and a transfer of money to richer people who live longer.
If we gradually privatize Social Security (which means that each worker OWNS their own retirement fund), then poor people will keep everyhting they input, and be able to pass along what they don't use themselves to their children - thereby increasing family wealth and increasing the chances that the family will emerge from poverty.
Gradual or incremental conversion to a private system is very doable - ON PAPER. It would take only a few minor, across-the-board changes:
(1) We gradually increase the age at which a person may collect benefits (say... one month every four months. In 15 years benefits would be available to people at age 70 - an age more in keeping with current real-world demographics.(2) We should exempt the first $15,000 of income from the payroll tax, and raise the ceiling of the payroll tax to make up the reduction.(3) We gradually allow payroll tax-payers UNDER THE AGE OF 50 to divert from 5% to 15% of their payroll tax to special accounts IF AND ONLY IF they agree to take a proportionately larger reduction of benefits when they retire (let's say twice as much). In other words, if they divert 15% of their payroll tax into a personal account, then they must take a 30% reduction of their benefits upon achieving retiurement age. This guarantees that the diversion of payroll tax won't deplete the outflow of benefits, and keeps the current Ponzi Scheme afloat for older people who are stuck in it.(4) We gradually increase the amount that people may divert to personal accounts until every worker has a personal account, and the current Ponzi Scheme disappears through attrition - probably around 2050.
The incremental nature of this plan - combined with the exemption of lower income people from the current payroll tax (and raising the income ceiling of the tax) - makes it very friendly to poor people who - after all - have less assets to depend on for their own retirement; (this was - after all - the target group for the scheme to begin with).
Another way to make retirement easier for poor people is to increase home ownership; home ownership is a MAJOR source of middle class wealth. We should aggressively PRIVATIZE low income/public housing and make poor people OWNERS and stakeholder in their homes and neighborhoods. By sweat equity alone, they can increase the value of their homes, and thereby create a nest egg.
All it will take to accomplish ALL of this is for the public to THINK ANEW.
The public must be encouraged to be bold enough to seek new contemporary solutions to these issues, and not remain shackled to the solutions which seemed workable in 1935. We should no more expect a retirement scheme designed in 1935 to be viable now, than we should expect a 1935 plane to be able to fly us around the world, or a 1935 telephone to afford us wifi connectivity.
In this sense, privatization of Social Security must be seen as a long overdue innovation (and not merely something needed as a result of demographics).