 Our next speaker is quite knowledgeable in this area and has written a book, Social Security The Inherent Kind of Prediction. He was also the author of the late Clark's position paper on detailed position paper concerning a phase out of Social Security. During the Clark campaign, he's a lawyer, graduate of Harvard Law School, and formerly, until just recently, the major New York City law firm. He was the editor of the newsletter of the Center for Libertarian Studies and a whole host of other credentials that I won't worry with because I'm going to let people for hours come up here and tell you about Social Security. Thank you, Michael. Both the liberals and the conservatives are in big trouble over Social Security. The liberals have always wanted to finance the program out of general revenues. This seems even more attractive now that the program is in such financial trouble. But even liberals have begun to wonder why everyone, including the wealthy and the non-poor in general, should be paid large Social Security benefits out of general revenues. In any event, liberals for the moment feel that general revenue financing is politically infeasible, so their short-term solution to the problems of Social Security is to raise payroll taxes. But the American people don't support further payroll tax increases. Moreover, simply raising taxes will not solve all the problems of the program. The conservatives oppose general revenue financing. Nor, after their successful national campaign last year on an anti-tax platform, can they support further payroll tax increases. Their long-term reform agenda is to privatize at least some aspects of the Social Security program. But they presently feel that this too is politically infeasible. So their short-term solution is to cut benefits. But the American people don't support cuts in Social Security benefits. Moreover, simply cutting benefits will not solve all the problems of the program. Fortunately, there is a solution to the problems of Social Security that will work, that involves neither cutting benefits nor increasing taxes, that should be supported by the public, and that will enact both the long-term agendas of both the conservatives and the liberals. This solution involves broad-scale fundamental changes in the U.S. retirement system as a whole, that will enable young people entering the workforce today to have a far more prosperous and secure retirement in their future, while at the same time maintaining benefits that the elderly and those near retirement, for whom it is too late to make major changes in the program, have come through a lot. The form that I will outline here, and that I discuss in my book, is in fact guided by the principle that everyone should receive at least as much in benefits as they expect to receive from the current system, while today's young workers will eventually receive much more. First, let's review some of the major problems of the program. The program has several powerfully negative effects on the U.S. economy. The most important of these is its negative impacts on saving. Social Security operates on a pay-as-you-go basis. The amount paid into the program is not saved and invested, but is immediately paid out to current recipients. The private system by contrast is fully funded, with each individual's payment saved and invested for his own benefits. Substituting pay-as-you-go Social Security for this private, fully funded system results in a massive loss of savings to the private economy. Less savings means less capital investment, less capital investment means less national income. In 1979, this negative effect of the program alone needlessly cost the American people at least $450 billion in lost GNP, or approximately $2,000 per person. Neither raising taxes nor cutting benefits will solve this problem. Probably the most significant problem playing Social Security is the programs developing inferiority to private sector alternatives. Instead of participating in Social Security, as I really don't need to explain in detail to this audience, individuals could be allowed to use the money they would otherwise pay in Social Security taxes to purchase a package of investments and insurance policies in the private sector, which would provide the same kind of benefits as Social Security. Young people entering the workforce today couldn't in fact receive much more in benefits from this private alternative system. The superiority of this private system is due to the fact that it relies on wealth creation rather than mere income redistribution. The savings and investments of each individual in the private system create or increase wealth, and this additional wealth is returned to each individual investor in the form of a rate of return on investment. Over the years, this rate of return accumulates to quite large amounts, and individuals would accumulate huge estates in this way by retirement age. Through Social Security, however, this accumulated rate of return and wealth creation is lost entirely since the program operates on a pay-as-you-go basis and no investments are made. That is why in the mature phase, they will never be able to pay as much in benefits as the private system. This is true even though in the early years of the program, individuals did receive much more Social Security than they would have received through private alternatives. In the early years of a pay-as-you-go program, the startup phase, individuals at or near retirement will pay little or no taxes into the program, yet will receive full benefits. They will therefore receive a very high return on any taxes they do pay. But this is only a temporary phenomenon since as the program matures, individuals will eventually be paying taxes into it all of their lives. At this point, individuals are simply using the accumulated returns they could receive through the private alternative system and are therefore receiving lower benefits. I think this is a particularly important point because it indicates why there's been such a change in public attitudes towards Social Security, why it's possible to actually consider major fundamental changes in the program. Up until now, we've been enjoying the startup phase, which takes about a generation of phase in, but that startup phase is now over and everyone is now going to have to suffer in the mature phase of Social Security and they are now, I believe, the public is much more willing to consider broad-scale fundamental reforms. To understand the magnitude of this problem, if we focus on young workers entering the workforce today, these workers at all income classes could through the private system receive more than twice what they would receive in Social Security and in some cases, more than six times. Social Security is therefore literally impoverishing young workers entering the program today and this incredible unfairness to these workers simply must be rectified. Again, simply raising taxes or cutting benefits will not solve this problem. Another overwhelming problem with the program is its potential bankruptcy. This involves both a short-term and a long-term problem. In the short term, the combination of inflation and recession over the past two years has again brought the program to the brink of bankruptcy. In a recession, tax receipts fall because employment and wages grow more slowly or decline and therefore the payroll tax generates less revenue. If inflation continues at the same time, however, expenditures increase since benefits are indexed. The recent combination of both these economic trends has brought Social Security to the point where it will be unable to pay all its promised benefits some point in the next two years without some significant changes in the program. Indeed, Budget Director David Stockman said just this week, testifying before the Senate, that unless something is done soon, quote, the greatest bankruptcy in history will occur on or about November 3, 1982. All of this less than three years after the Social Security Board of Trustees stated in their 1978 annual report that the mammoth 1977 tax increases had ensured the solvency of Social Security, quote, throughout the rest of this century and well into the next one. Right. The long-term bankruptcy problem is due to the profound changes in demographics over the past 40 years. The following up of the post-war baby boom with the baby bust of the 60s and 70s means that the workforce will be declining just as the retirement of the baby boom generation will be increasing benefit recipients. As a result, though there are 31 beneficiaries per 100 workers today, by 2025, when today's young workers are retiring, there is likely to be 62 beneficiaries per 100 workers, and by 2035, 73 beneficiaries per 100 workers. Because of these changing demographics, in order to pay the benefits promised to young workers entering the workforce today, Social Security taxes will have to be increased from the current 13% of payroll to 25% to 33% of payroll. The specter of Social Security taxes alone consuming 25% to 33% of the income of most Americans should be frightening. It is my opinion that the public will not support such tax risks. People have other things they want to do besides pay taxes. Social Security program will thus not be able to meet all its future benefit obligations and can consequently be considered bankrupt. Moreover, I would also consequently advise young workers entering the program today not to count on receiving all the Social Security benefits currently being promised to them and to not make their future plans based on such benefits. I also think that it is an outright scandal that the Social Security benefits promised to these young workers are not only inferior to alternatives but are also unlikely to ever be paid. These bankruptcy problems are all due to the fact that Social Security does not have a true trust fund or saved up assets to finance benefit obligation and instead relies on current workers through its pay-as-you-go system of financing. If the earnings of these workers are insufficient to cover benefits due to poor economic performance or if their number isn't adequate due to changing demographics, the system runs into deep trouble. In the long run, without saved up assets or any other mechanism, these problems will continue to plague the program no matter how much taxes are raised or benefits cut. The final problem of the program to be noted is its serious restriction of individual liberty. The program is quite simply compulsory. All Americans are forced to participate regardless of their preferences. As a result, individuals lose control over a substantial portion of their incomes, a portion which may in the future rise to as much as a fourth to a third. It's hard to understand why people as liberals have not been concerned over this serious loss of liberty. Freedom to control one's income is surely at least as important to the average American as the other civil liberties which have received so much emphasis in recent years. Again, I note that simply cutting benefits will not solve this problem and God knows that raising taxes won't. There are many other problems in the program but the message by now should be clear. Social security has grown too big and its negative impacts on American life have become too severe for the program's negative effects that continue to be ignored. If these problems, the program, can all be solved if we can transcend the conservative liberal economy of raising taxes and cutting benefits. Let me outline our informed proposal which we'll do precisely that. The first step in such a reform is to abolish the payroll tax. Individuals will then each be allowed to save and invest the amounts they would have paid in Social Security Taxes in their own individual retirement accounts. Through these individual accounts they will receive investments for their retirement but could also purchase life, disability and health insurance. Establishing an overall package which will provide all the types of benefits which Social Security does. All investments made through these accounts would be fully tax free so that individuals would receive the full before tax real rate of return on such investments. At the same time, Social Security benefits would continue to be paid out of general revenues as liberals have long advocated. Such benefits would be reduced over time however the amounts which individuals had earned through the private alternative system. Eventually, therefore, such benefits would be completely phased out along with the need for subsidies from general revenues. But at all times, Social Security at all times total benefits from both the private and public systems would be at least as great as expected benefits under the current system. Concerns that the poor would be unable to save sufficient funds under such a system could be meant by updating the currently existing SSI program for revenues to the elderly poor based solely on need. What to do with this program from a libertarian perspective, this SSI program at a later date would be a matter for a study of general welfare reform. Fears that individuals would not voluntarily save and make retirement investments and insurance purchases on their own could be answered simply by a short term requirement that they do so if it was necessary to make the reform politically feasible. Such a requirement is obviously objectionable from a libertarian standpoint. It would allow the rest of the reform to go through attack and it could always be phased out later. People who speak on these issues and discuss these reforms around the country in their experience are the same as mine. The constant objection is people won't save on their own and I can argue about paternalism all I want but no one's going to say they don't believe me. So I say alright, just require them to save for now and we'll get the rest of the reform through. The immediate result of such a reform would be the increased savings and capital investment by well over $100 billion per year. This would result in a conventionally substantial rise in GNP eventually reaching an increase of 20%. At the same time today's young workers would receive far greater benefits than another present social security system since their retirement savings would accumulate along with a substantial rate of return. The financing problems of the program would also be solved since each individual would be saving up his own trust fund to finance his own future benefits. Even with the savings requirement individual liberty would be increased since individuals could choose their own package of private alternatives. Once the requirement was phased out total liberty will have been achieved. As a side benefit it should be noted that as a result of this reform total federal spending would have been permanently reduced by at least one third. Yet we have accomplished all this without increasing taxes or cutting benefits. This is made possible by the wealth creation aspects of the private system The additional wealth created by the investments in this system not only allows benefits equal to those promised by Social Security to be paid without increasing premium payments over the amount of Social Security taxes that would have been paid, but it allows even greater benefits. Both permanent tax increases and benefit cuts could therefore be avoided while solving the program's financing problems and allowing younger workers to receive much higher benefits. There's still one problem with this reform that we haven't addressed. Social Security benefits would be financed with no payroll taxes. The immediate result would be a general revenue deficit of over $100 billion in the first year. Though over time this deficit would be reduced it still would be a major problem for a few years. In an ideal world this deficit could be made up by cutting other government programs and selling government assets. But this course is not likely to be fully feasible until we can elect our president. In order to make this reform feasible now therefore we need to take another approach. This approach would involve raking up the reform into small pieces and phasing it in more slowly over time. A way to do this was in fact unwittingly charted in of all unlikely places the Carter administration. The Carter Commission on Pension Policy came out with a report at the very end of Carter's term recognizing many of the shortcomings of the Social Security's Pagio system which I have discussed. To solve these problems the report recommended increasing reliance on fully funded private alternatives to Social Security. To accomplish this the report recommended requiring employers to contribute 3% of payroll to private fully funded pensions for their employees with most of this 3% deductible from the employer's income taxes. This proposal would have cost the perpetual treasury approximately $40 to $50 billion per year. I would modify this proposal in a few respects to make it more consistent with my long term reform proposal. I would allow both the employer and the employee to contribute 1.5% of taxable payroll to a private fully funded system for a total of 3% and allow them to deduct this from Social Security taxes rather than payroll taxes. For employees who took advantage of this possibility Social Security benefits would be reduced by a proportionate amount. If all workers took advantage of this possibility it would cost less than $40 billion a year in lost revenue. This is a perfectly feasible amount for the government to absorb over a number of years as a result of this tax cut. After a few years this 3% figure could be raised to 6% then to 9% and onward in small bites until the Social Security payroll tax was completely eliminated and the new system phased in. Government could periodically increase the percentage whenever it would otherwise have enacted an income tax cut. This would make the entire reform easily, fiscally and economically workable. To modify it in these ways I frankly cannot think of any reason why anyone whether conservative or liberal, Republican or rich or poor, labor business, black or white should oppose this reform. To oppose the promise of making everyone better off and no one worse off. Indeed perhaps no other single reform could so much increase the freedom and prosperity of the American people. Since I went through this complicated reform or proposal and expressed some new ideas I'd be willing to accept any questions that people might have at this point. Must be some questions. Okay, answer your question. Roy. Yeah, what groups do you see as being major obstacles to getting this accepted because can we keep it done? You find a way beyond this financial system that is really going to become quite oppressive. What groups besides Social Security bureaucrats maybe do you see as really opposing in one? I can't think of any major public interest group that should oppose this once they understand it. There may be some people out there who just measure the goodness of the society by the amount of federal spending and for them it'll alienate, but I don't think they're a major voting plot. Probably around the image question but can Reagan propose this and it really will change the people proposed of building people that descended on the Capitol. And you saw it on TV you're in Washington now the hearings and everything. One old person after another running up there screaming about starving in the street that it seems to be just that image problem. How do you get around that? Well, I think that was the result of his they want to do it the hard way. They want to cut benefits. I think that opens up the opportunity for something like this because now I can rush out and say no, let's not raise taxes or cut benefits. Let's do this instead. Let's just get rid of the whole thing. And then you don't have a situation of people saying they're going to starve because I mean my objective and this was to design something that would move us forward without alienating any group and while you know you might there's an SSI program here and I ran a savings requirement there by putting these things in I think we got something that can be that any old Democrat or Republican could vote for and something that could happen in the next 48 years. And I think that what is happening now is very useful that Reagan make these proposed budget cuts has completely turned around the whole social security issue. People are open to new ideas everyone realizes that that the whole problem is intractable and I think that what he's done will not I think that what they propose will not be successful in solving problems in the way they expect. What it will do is make people turn to something like this just through the logic of events. Do you think that you should never try to talk to somebody like Jen Campbell about it to see if you can get an approval? Well I suggest to Ron Paul that this could be his camp raw but he's in enough hot water enough things as it is. Eventually I think some smart young guy congressman is going to pick up this and run with it and he's going to write the national promise on it but I haven't found that guy yet. Why don't you want to talk slower and run for office? In terms of what it continues basically the whole three system we have now a private tax is no less better than a public tax it sounds a very much proficiency argument that we always criticize conservatives for. There's two answers one is it's not the benefit even with the savings requirement is that you privatize this enormous, you denationalize this enormous social security system it's being operated in a private market instead of in a public market. People can choose in the private market more one less than one other they can choose the kind of coverage they want there's a lot more freedom involved and once that new system is phased in the difficult part is dealing with the unfunded liability once we get to the point we can get out from under this burden providing benefits to people who are now old and relied on this thing and haven't saved them any other alternatives yet developing this funded system once we figure out a way of getting out of that a savings requirement or savings restriction could be phased out later it would be more obvious to people once they see how this private system works it would be more obvious to them once it's intact and say alright now all we have is this stupid savings requirement let's phase that out in other words I think to make it politically possible to start moving just put them in order I'm opposed to a savings requirement it's unnecessary government paternalism in my book I have all these pages of philosophy explaining why it's so good but not everybody reads all this philosophy and so to make this into something that I hope can happen in the near term I think it's the way to do it I think you're really right about that brick wall all that philosophy won't do much about the brick wall of people saying but nobody will say that's what I keep running into when I suggest that sort of idea but I was just wondering about a couple to clarify in my mind what you're proposing in particular the older people for near retirement age would not be paying any payroll tax at all but they would collect the entire benefits that they would expect they also pay that one and a half percent into their private everybody below the age of 65 would pay the 1.5% from there and their employer into this private system until they got to be 65 then they would their social security benefits would be reduced by the amount in this private alternative so that they would continue to receive the total they expected otherwise partly from the social security system and partly from the private system that's right yes how long would you expect an individual to have to say in an idea of what equally have to start this plan to completely be independent of social security it might not be as easy to put into our life it could maybe go from 50 to 65 to have accrued sufficient assets to provide similar benefits what is that cutoff age? I think it's around the age of 35 I think to live that cutoff age depends on what your soon real rate of return is depends on what investments you think are feasible I think that the age it could get as high as 40 if you were willing to put all your assets into a wide distribution of common stocks a lot of retirement investment advisors don't recommend that people do that I'm not sure why that is because if you buy enough of a broad range of stocks your risk will be spread enough so that won't be a problem who selects the savings vehicle that the private person would put his fund into and how do you regulate the insistence that he saves some of his money the private person would choose the savings vehicle on his own I would hope to resist any regulations on what he could save individual retirement accounts probably have a lot of regulations and as part of the reform I discussed getting rid of those because those regulations force the rate of return that can be earned by those retirement accounts down so I mean I certainly for this group I don't need to explain why you don't need you don't want to have regulations on the savings vehicles really there's two problems in this one is the let's say two other brick walls one is it relies on a certain amount of basic economic knowledge which is not very great in this country people have are fairly good on the microeconomics of their own household but are terrible on microeconomics applied over big economic pictures so that's a big problem the other problem is when you say that they would be free to and put their savings into any of a number of vehicles for retirement people will say a number of people will say well those are all much more risky than putting it in the government hands which are stable and you know rock and the broth or not garbage and it's partly true some of the money that people will be putting into retirement plans will not come back putting into bad components well under this system people would still have the option if they liked the government's security they think they get from the government to buy US Treasury bills and those are guaranteed and they can count on the government to pay that back so I think that was a nice way of getting around that problem the problem that some people will lose their money is true to an extent I mean there are some long-term safe investments that you can already return on would be difficult to lose all your money some people might want to invest in riskier investments and I don't want to prevent them from doing that the fact that an SSI program currently exists to pay welfare benefits to other people who are poor I would think takes care of that problem because at least for now later you might want to get rid of that too but right now the existence of this program is that people who lose their money speculating riskier investments still won't start because there's still this program to take care of that problem you had mentioned and also a congressman on television last week mentioned that the Reagan's program was going to break the promise the promise was the word you used and he used of social security the promise that it's made to the American people I don't know what that promise is for example someone bought a car when there was no speed limit of 55 and they reduced it to 55 there was never any promise that I was going to stay at 60 is there some kind of a promise of social security well I don't think the I think there's a promise of security and I don't think it's analysis to buy a car when there wasn't a speed limit of 55 it was sold to people on the premises that they were going to get certain benefits when they retired I don't think it's of the same sense of obligation as a contractual promise because it was a public program and people didn't visually agree to enter into it Reagan's program runs into that problem because they advocate cutting benefits my program doesn't run into that problem because I don't advocate cutting benefits but instead phasing the system I think that this is you're never going to solve the problem with the program by cutting benefits you're never going to be able to cut them enough you're never going to be able to buy social security just by cutting benefits so there's no use in even wrangling over that issue I don't think yes how persuaded are you by the evidence that social security in fact reduces capital formation in the country could you say something about the evidence and how persuasive you find the evidence I think the evidence is overwhelmingly persuasive now there's a tremendous debate about this in economic circles and there's a thing about economists the legalistic aspect towards them they sort of beat the data for confesses everybody gets what they want and then so on these are the results that the author wanted so I repeat the question what's the evidence well let me, I'm not done yet Martin Feldstein is the professor of economics at Harvard University who's done the most in this area and he's got a series of econometric studies and he's got opponents who have a series of econometric studies and they argue over which variable should be an equation and you can argue about that for the rest of your life and none of them really know what the absolute answers are to that the problem is that the theoretical basis for the models of Feldstein's opponents don't make any sense and the theoretical basis for Feldstein's model makes an awful lot of sense there's one guy who seems to be good on other issues but on this issue he seems very weak his name is Barrow and he argues that the social security didn't reduce private savings because everybody saved their social security benefits to offset the transfer to them from their children that they had a certain amount they wanted to give to the children when social security enacted this transfer from their children to them they just saved the money so they could get it back to them when they retired when they died they haven't shown that that didn't happen all the theoretical constructs which back the alternative models that opposed Feldstein are based on similarly weak analyses there was a big controversy recently where some social security administration economists uncovered a calculating error in some of Feldstein's studies and when they ran into a change they found no impact on savings but Feldstein corrected that area ran his own studies and found the same big impact but what I'm really leading up to is I think all this empirical argument is irrelevant because what you should think of it as in terms of opportunity cost if we enacted this reform proposal there would be this enormous amount of savings because people would be investing in this alternative I don't care really what people would have done over the past 40 years what I'm talking about is what people are going to do over the next 40 years if they enacted the savings of program there would be this enormous increase in savings there would be this enormous increase in GNP and the current social security program is causing a loss in savings equal to that in terms of opportunity cost it's forcing the American people to forego that opportunity and that is the real reason why it's causing the savings loss so I don't think this econometric study really is relevant to the major policy question which is what should we do from here I wouldn't want to argue with you on the account of enders because I'm quite familiar with that debate that you're citing it and I agree with you that don't speak that evidence but I do think that you should be aware that the people this body should be aware that Barrow's argument is really quite an important argument because it is a very strong attack and it's a transient philosophy that we can fool ourselves with thinking we're welfare simply by creating debt for ourselves if you take this argument and apply it to the government debt and they get a whole idea of the government stimulating the economy by increasing the debt you'll find that it's an argument that we really want to be fake right I think or at least thinking very seriously about so I hope that people would consider that argument a little bit more carefully than to say it's obvious it's obvious that people aren't many other things that are intergenerational I think it's obvious Barrow's argument is an historical question Barrow's argument is based on historical is an historical question and for Barrow to be correct individuals in the 1940s and 1950s to receive their social security benefits would have had to save them and I contend they didn't do that I contend they spent those benefits and they bought the food and clothing housing with them I think that there is something to that argument that he's trying to find there's no detail on it he's taking an argument to an extreme there's a theory that everything the government does has no effect because the market offsets it and it's a market-oriented argument and I don't think it applies in all circumstances if it was true there's enough press to worry about and we could just all laugh every time they announce a new program but I think it doesn't work out I had a question I don't think I completely understand what your program is because it seems like we're getting something for nothing on it the people who have paid in they're going to be getting their benefits once they reach 65 if the people now are enabling to stop paying in we have to get some increased production from somewhere to pay those additional benefits and the money that's being saved is being built up and it's not being consumed it's being used to increase the wealth where does the additional production come from well I don't I didn't the money is saved and invested and the theme there's 125 million dollars paid in those 30,000 a year if you took that money and you saved and invested it you would increase wealth through those that had that extra 125 million dollars of investment would increase wealth by the full before tax rate or about 13% a year so in the first year you'd get an increase in wealth of about 10 billion and in the next year you're still paying out to all the people who are receiving their social security benefits who are consuming that's out of general revenues but that's still it's a cost and it has to be produced somewhere where is it coming from it's a cost that comes it's produced somewhere that's right produced out over the long run and it's paid for by the increased wealth that is generated out of there's two ways it comes from it comes out of this increased wealth that's generated by the private systems investments and it comes through this reform proposal out of cutting other government or restraining the growth in other government expenditures because this like they have the 3% in the first year because this 40, 50 billion dollars is going to have to be made up come out of general revenues to pay for social security benefits over those when that 3% reform is enacted that's 40, 50 billion dollars less than would have probably been spent on some other government program so the combination of those two factors is the way I financed the way out of this program we rely on the increased production of the private systems through the investments and you rely on squeezing some of the other government programs and using that money to phase out the social security form you could think of the social security reform as a program that costs this much every year but as long as you don't increase general revenue taxes it's not a burden on the people it's something that comes from causing government programs to compete with each other we could take two more questions if they're fairly quick alright I think what I heard the first time around when we started was that you're going to have this short-term fold in the increase in the general revenue deficit that I think is going to be the cost the short-term cost you're going to have a large inflation for a short period of time the interest rates weigh up and have a depression well it's not going to matter it depends on how you finance the deficit whether you get either of those two a couple of ways of financing it could result in those two things that's why I advocated breaking it up in small pieces because this is what more mainstream Republicans and Democrats say they say we agree with your critique of the system I think you're right but this $100 billion deficit is too much so that's why I developed a way to break it up in small pieces the smaller piece reform means a deficit of $40 or $50 billion a year which is just your typical any-year-old deficit that comes out of cutting taxes periodically which people do and I would think that we're going to continue to cut taxes what I'm saying is if future tax cuts after they do this can't brought a series of cuts or anything else if future tax cuts are focused on social security payroll taxes for a while instead of income taxes and phased in along with this kind of program that thing can be consumed by the government without creating without increasing general revenue taxes or without causing inflation yes what you're doing in some sense is cutting everybody below $35 and you're phasing out everyone above that $2.65 if you will at the top of that triangle everybody is in glory some of them don't provide for some of their retirement that's your bulge so absorb that out of other services if that's enough what you're saying then I don't understand so I want to do that's all I wanted to outline in detail the money comes here because we're going to do this instead of other tax cuts I'm assuming that periodically the government cuts income taxes to stimulate the economy or because periodically somebody wakes up to the idea that taxes are too high so I'm saying the future tax cut times come up let's do this first thing up to 3% then let's do it up to 6% instead of doing those other tax cuts for a while and that will phase this whole thing out I hope that's clear I think we're going to have to cut it off I'd like to thank you