Lessons Learned the Hard Way: on Social Security


Show true cost of FICA--double what is shown on paychecks

The social security system was originally based on the principle of a low rate of return per dollar invested because there were so many workers and so few retirees that the system could transfer wealth from the worker to the retiree without anyone noticing or complaining. It was fine for 1935, when it was devised, but now, we are entering a very different era. The generation known as the baby boomers is so big that if we retain the 1935 system, the boomers will bankrupt the retirement system their children and grandchildren will turn to in about 30 years.

One of the steps we need to take is to amend the law so that an individual’s paycheck reflects the amount of money that is actually being paid into the FICA system. People will realize that they are paying twice the tax they believed they were paying. For over half the American population the total FICA tax they are paying is bigger than their income tax.

Source: Lessons Learned the Hard Way, by Newt Gingrich, p.209-210 Jul 2, 1998

Convert to IRA-based system

We are now able to develop a personal, modern, social security system. Information technology makes it possible to handle each person’s retirement account separately. For another, the growing understanding that the system we have is in crisis makes people more willing to discuss new proposals than they used to be. Not that many years ago, few people who understood the true, underlying predicament of the social security system dared to be candid about it in public. Our ability to keep track of individual accounts combined with the power of compound interest creates the possibility for new workers to have four or five times as much money for their retirement as they would have if we kept the present system. One estimate is that for a 20-year old today, a system of individual retirement accounts would provide $975,000 in retirement as compared with the current system’s $175,000. Why would anyone want to cheat a young person out of the possibility of one day having an additional $800,000?
Source: Lessons Learned the Hard Way, by Newt Gingrich, p.210 Jul 2, 1998

  • The above quotations are from Lessons Learned the Hard Way: A Personal Report, by Newt Gingrich.
  • Click here for definitions & background information on Social Security.
  • Click here for other issues (main summary page).
  • Click here for more quotes by Newt Gingrich on Social Security.
2016 Presidential contenders on Social Security:
  Republicans:
Gov.Jeb Bush(FL)
Dr.Ben Carson(MD)
Gov.Chris Christie(NJ)
Sen.Ted Cruz(TX)
Carly Fiorina(CA)
Gov.Jim Gilmore(VA)
Sen.Lindsey Graham(SC)
Gov.Mike Huckabee(AR)
Gov.Bobby Jindal(LA)
Gov.John Kasich(OH)
Gov.Sarah Palin(AK)
Gov.George Pataki(NY)
Sen.Rand Paul(KY)
Gov.Rick Perry(TX)
Sen.Rob Portman(OH)
Sen.Marco Rubio(FL)
Sen.Rick Santorum(PA)
Donald Trump(NY)
Gov.Scott Walker(WI) 		Democrats:
Gov.Lincoln Chafee(RI)
Secy.Hillary Clinton(NY)
V.P.Joe Biden(DE)
Gov.Martin O`Malley(MD)
Sen.Bernie Sanders(VT)
Sen.Elizabeth Warren(MA)
Sen.Jim Webb(VA)

2016 Third Party Candidates:
Gov.Gary Johnson(L-NM)
Roseanne Barr(PF-HI)
Robert Steele(L-NY)
Dr.Jill Stein(G,MA)
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Page last updated: Feb 25, 2019