It has been almost three weeks since former Libertarian Party presidential candidate Marc Allan Feldman passed away. Feldman, an anesthesiologist from Cleveland, was a beloved Party activist who finished 5th in the presidential primary voting at the Libertarian Party convention in May.
Among his many accomplishments in both his professional life, as well as in the Libertarian Party, Dr. Feldman is remembered for the closing statement–which is really more of a rap–he delivered during the convention’s presidential debate.
However, one part of Feldman’s debate performance especially stood out to me, and it was not the rap. While responding to a question about social security, Dr. Feldman put forth one of the most practical and ingenious solutions to the social security problem that I have ever heard.
As you are likely aware, the social security system is going bankrupt. The program is a huge portion of the federal budget and it is only growing. After years of squandering the payments of baby boomers, the government can’t afford the entitlement program now that the greatest generation has reached retirement. The taxes today’s workers are paying in can no longer cover the payments that retirees have earned. Each major party has at least some basic ideas on how to solve the problem: Democrats simply want to continue to borrow money to pay for the ballooning costs, while Republicans have introduced proposals that means test the program and raise the retirement age for those in the middle of their careers. Some bold conservatives have even offered total privatization as a solution. However, I don’t believe I have ever heard any plan that was as clever as the one Feldman proposed.
Dr. Feldman’s idea is to link social security with student loans. Retirees currently get a 1-2 percent cost of living adjustment each year–when the adjustment is sporadically offered–but students pay anywhere between 3.75 and 8 percent interest on federal student loans. If you allow workers to invest their money by purchasing student loans, you can theoretically increase the return for retirees and reduce the interest students have to pay at the same time. This solution is especially attractive given how burdensome college debt is becoming on young professionals. It kills two birds with one stone.
“Let the people mid career take care of educational opportunities of the kids, and then when the kids get jobs, they can support the retirements of their elders.” – Dr. Marc Allan Feldman
It is unclear how realistic the idea would be in practice, but it does seem like Feldman was on to something. Allowing workers to invest their retirement savings–money the government forces them to pay in taxes–in a way that actually allows them to make money has always been at the core of the best solutions to social security. When the government forces us to pay into a “retirement system” that offers so little interest that it does not even track inflation, they are literally stealing from us. They force workers to pay into a program with no promise that they will ever receive a dime of benefit. If the state won’t let workers opt out completely, maybe it will at least let them earn a decent return while also helping to solve the student loan crisis.