The number of private employers who offer retirement benefits to their workers continues to decline, and only 18% of workers participate in private plans, compared to 80% of public employees.
In addition, private employers are less likely to offer "defined benefits" based on years of work and levels of pay. Increasingly, private retirement plans are "defined contributions" programs based upon 401(k) plans and Investment Retirement Accounts (IRAs), which are dependent upon the stock market and Wall Street manipulations.
What is needed is a personal retirement plan that is more secure for workers and small-business owners and which is good for the country and its economy.
An alternative investment plan would supplement traditional Social Security and allow all Americans to make additional tax-free contributions into personal accounts in a retirement fund that invests its assets in the obligations of local and state governments, rather than the federal government.
Tax-free municipal bonds have always been a wise investment for most people because they provide a better return than passbook savings accounts, without the risk of stock market gambling. A national retirement fund should provide the same benefit to all workers and small-business owners, allowing them to obtain a reasonable return on their investments at a minimal risk to their retirement plans.
Employers could agree to match "All-American" contributions as a job benefit; employees could move their accounts with them from job to job; workers could negotiate the level of each subsequent employer's contribution; and small-business owners could safely invest in their own futures.
Retirees could decide for themselves whether to invest their savings in a lifetime annuity at retirement; they could choose to spend their entire nest egg as they please; or they could leave it to their heirs.
The stability of investments in state and local bonds would require minimal management costs, increase the rate of returns, and would allow the principal and earned interest in personal accounts (which could be withdrawn at any time to meet emergencies) to be guaranteed by the federal government just as it does for bank deposits.
All-American accounts could be established by parents at the birth of their children and grow throughout an individual's lifetime until they choose to retire. There could be survivor benefits similar to those provided by traditional Social Security, and the personal accounts could mature as early as age 55, allowing workers and small-business owners to transition into other, and perhaps more interesting secondary careers.
The United States would benefit as a whole from an alternative personal savings plan by having a readily available, domestic source of investment funds to restore and improve its state and local infrastructure and public facilities.
Rebuild the Infrastructure
One of the driving forces of the U.S. economy during the last 60 years has been the construction of a vast infrastructure including roads, bridges, water and sewer systems, river locks and dams, all of which is at great risk, especially in the case of a massive earthquake or other natural disaster.
Today, 25% of U.S. highway bridges are "functionally obsolete," "structurally deficient" or simply too old to be safe, and vehicle traffic congestion alone costs Americans $78 billion annually.
Public water systems waste more than seven billion gallons of fresh water each year, and the rising cost to repair them is now estimated at $335 billion.
Billions of gallons of untreated wastewater are discharged each year into rivers, lakes and oceans, and more than 4,400 dams are susceptible to failure.
The cost of repairing the overall infrastructure is estimated at $2.2 trillion over the next five years. However, every billion dollars invested in the maintenance and repair of the infrastructure will create 35,000 jobs and will generate $6.1 billion in new economic activity.
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