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I will describe the way a Russian company operates, as I have had an intimate look into its inner workings, to shed some light on the logic, strengths and shortcomings of Russian mentality.The PatriarchThe head of the company and the majority stakeholder is a Patriarch. He didn’t start this way, but gradually the collective need dictated he filled the shoes of the Patriarch archetype to command respect and obedience of his employees.The employees entirely depend on Patriarch. If they show an initiative, it is called “being ambitious” and frown upon. You should never forget who’s the Patriarch in this relationship.This situation makes the employees feel safe, protected and spiritually calm. It makes Patriarch rich, at least a thousand times richer than any of his employee, which is important, because he is a Patriarch.Patriarch can easily start paying his employees half of their wages by withholding the advance part of the salary, which had been done on a number of occasions, and the employees wouldn’t say a single word of complaint.They bend their will to their Patriarch. If Patriarch decided to withhold their salaries, then there is a good reason for it. Probably it was their fault. The new generation interprets it as: it’s his company, his rules. Besides, I can always quit.On the other hand, Patriarch is quite generous with the amount of wages that he pays, so you might re-consider quitting over losing a few salaries, although this depends on how close the employee is to Patriarch.The most important positions are given to his relatives, regardless of their education or work experience.Why? It’s a man’s duty to provide for his family and the family is the most important thing a man has, so should always be given top priority.A wealthy man is obligated to provide for the extended family. Patriarch’s employees are his extended family. It doesn’t matter if they work well or not, if they contribute or not. They are there in his office, working, or at least pretending to work - this what really counts.Patriarch likes to establish emotional connection with the important employees, which helps to establish loyalty. Loyalty to Patriarch is the glue that keeps the company together. Without loyalty, the employees would all run away in different directions. Lack of loyalty leads to chaos.Of course, Patriarch doesn’t love everyone equally, he’s just a man, but this is an important part - emotions and feelings are given a priority over the cold calculations of the mind.This presents an emotional problem, because when someone quits or double crosses him, Patriarch takes it personally and locks himself up in his room to sulk.The second most important positions are handed to Patriarch’s best friends.Why? This is a matter of loyalty. He can trust them. They are rich enough to understand such things as Hermes, Michelin stars, Azbuka Vkusa, Forte De Marmi, Land Rover, Bentley, Barvikha Luxury Village.Patriarch can communicate with them the way he can’t with some strangers whose CVs he pulled off HeadHunter. A Russian takes forever to warm up to you and you have to endure suspicion, hostility, aggression, indifference, interspersed with curses and threats. If you manage to survive beyond this hard stage, you got a friend for life, you got family.After you have good fortune to have an opportunity to endure every type of mental and physical abuse from Patriarch, you might enter Patriarch’s inner circle. Because it only looks like Patriarch is a friendly, outgoing person. He’s a Russian and as such to get a real relationship that counts you have to endure hardships with him.To show their gratitude, the employees chip in every year and buy Patriarch an expensive oil painting so he could put it on the wall of his office. The number of paintings signify the number of years his employees have been devoted to him.Patriarch often shares home food with the employee of the day, which he/she should never refuse, because Patriarch would take offense. A friendly advice: never refuse food or vodka when a Russian offers it to you.Patriarch likes to make guests and employees wait for him, often for hours, depending on the status of the person. It shows that Patriarch is a busy and important man. If it’s a VIP, he’d sit there waiting for him ten-fifteen minutes before he shows up.If you ask Patriarch for help he would rarely refuse. This is not just a company - it’s family, and he is the father.The BossesThey are given their own offices. They are also absolutely useless. They are allowed to be, since they are friends and relatives of Patriarch. They are paid through the nose and walk with a swagger, but all their work is done by a special caste of employees, “Workhorses” (see below).They have zero power, because all the power lies in the hands of Patriarch. They might have fancy job titles, and other employees too, but it’s all fake, just to make them feel important. In truth, they have no power, no say.They always talk very loudly on the phone so everybody could see they are busy, too. They discuss brands, expensive restaurants, trips to five star hotels in Europe, quality food, or try to connect with employees. They come and leave when they like, unless they sniff out big money’s coming in soon, then they come early and stay late to get on a good foot with Patriarch.When the money comes in from the sale of the rights to one of the products, Patriarch calls them over to his office to divide the spoils. There are heated disputes who gets how much.Patriarch’s got a silent partner and there’s a fight between Patriarch’s relatives and the partner. Financial director is also called in and thrown a little bone to shut her up just in case you know. Patriarch gets half, and the half is split, depending on the results of the negotiations with each person claiming he has done more work than this dude or that dude.As a result, luxury vehicles and luxurious apartments are purchased and the old ones renovated, trips to Europe organized.The rest of the employees don’t see a penny of that money no matter how much they contributed.The WorkhorsesWorkhorses are the most loyal troops - they would readily give their lives for Patriarch. Their love for Patriarch is boundless. What’s equally important they are the most hardworking employees.They do Patriarch’s friends’ and relatives’ work, while being paid a fraction of their salaries, without batting an eye. This is a burden they carry quietly and proudly. They love to work and sometimes get a hug or a pat on the shoulder or a kind word from Patriarch. They come to the office first, they leave last.They like to think that Patriarch needs them greatly in the same way horses probably feel for their human masters who ride them.Of course, they have absolutely no one to blame, but themselves. Nobody forced them to love Patriarch and work hard.The Nuzhniki (the Necessary Ones)Since much of Russian economy is still informal, lots of deal-breaking goes on behind closed doors or over the phone. Oiling cogs of beaurocracy is part and parcel of doing business in Russia, and it also helps when you know a government official personally.Employees who know the right people and can solve problems and help speed things up are called nuzhniki (the necessary).There’s one nuzhnik, whose son is an official. He has an office and he has absolutely no work to do.They can come and go at will as long as they get the work done. They are provided with a car, a driver and a very good salary. A driver is a status symbol. If you have a driver, you’re an important man (or a woman) and command respect.The Bosses dislike the nuzhniki, because they have a lot of sway over Patriarch.The Problem CreatorsA new employee in senior management position would immediately bring in his own team for two reasons. The first is to provide buffer when Patriarch becomes dissatisfied with his work. Buffer employees could be fired one by one prolonging the agony of the senior manager.The second and most apparent goal is they can do his work, so he can have more time for the family or hobbies. There’re too many buffer employees that take on work of just one person, so they soon figure out they need more work if they want to keep the job.What they do is create problems for the rest of the employees out of thin air. If they have any brain, they’d help to solve the problems they created. However, more often than not they just point out problems, where they had been none, and don’t offer any solution, because they are not sure there are solutions.This trick is quite often used by older employees who are not Free Riders (see below) who suddenly find themselves without any work and need to justify their employment.The Free RidersThese employees have special status with Patriarch. For example, the son of a friend, or a neighbor’s daughter on the mother’s dacha. This could be an employee that was attached to a business when it was purchased by Patriarch, with an agreement that ran something like this: “Vas’ka now belongs to you, you are to guarantee his employment until his retirement or infirmity.”Normally, free riders work on short-term projects, and soon realize that no matter if they work or don’t, try hard or not, they will not lose their job, but neither will they get promotion or a salary increase.Why? Because they don’t have any special talent or skills and don’t know any important people, and yet they can’t be fired.After the realization dawns on such individual, he/she stops putting in any effort and begins to wilt away, abandoned and unneeded, collecting paychecks.Normally, Workhorses fix their screwups and pick up their unfinished tasks.The MavericksPatriarch often brings a new talent into his fold who he believes can make the difference and help him rake in more money. He throws an outsized paycheck at a maverick and provides him with a team.However, after a few months, there are no concrete results, nothing to show for the efforts and the money spent, and excitement gives way to disappointment.The maverick blames Patriarch for not providing enough resources, but the truth is the maverick had voiced no criticism until this point being blinded by the paychecks he was receiving that he spent on expensive toys.So yet another maverick gets fired to great relief of the employees who hate to see another snake oil salesman getting away with murder, while they get a salary cut to sponsor him and his team of friends and former lovers.The DriversIn post-industrial Russia, there are millions of men incapable of office work with no blue collar employment perspectives, because most of the Soviet factories where their fathers had worked were shut down.These men normally get two types of jobs in the city: guards and drivers.Driver is a respectable profession, because it forces the man to be sober most of the time. Having so many drivers might look silly to an outsider, but in fact it’s a social responsibility.There’s at least a dozen bosses and nuzhniki who have personal drivers. Patriarch alone has two personal drivers.They like to sit around with their smartphones and drink coffee. They also get to spend a lot of time on the road, and driving in Russia is a stressful activity.There’re Secretaries, who do correspondence and Patriarch family’s chores.There’re Pros, who have skills, knowledge and experience and normally left to their own devices. Make no mistake: they don’t develop professionally. Unless they’d like to have a friendly FSB officer have them arrested over email correspondence with a Western university.There’re Conmen who get employment only to take the company to court over some contractual infringement.There’s Oldies, who’d been with Patriarch from day one - not hardworking enough to be Workhorses, nor insignificant enough to be Free Riders, who had gotten all the material things they needed and turned into drunks out of sheer boredom.This is modern Russia’s society in miniature. There’s top-bottom system of governance, with the very top skimming off most of the money and power. There’s a narrow slice of the society that actually brings value, with none or close to none professional development.Whatever money’s left is spent on buying Western equipment and resources, because almost nothing is produced locally that can be used as assets or capital.There are enormous taxes, stacks of cash an owner has to bring to the intelligence services in boxes “to protect” his business.Social contract guarantees that everyone’s employed and gets paid - a lot or a little depending on his/her luck, and the business is crawling along - products are produced or imported and sold.The owners are paid disproportionally, but this is justified by the fact that they have organized and are running this system.The problem is all the progress and innovations and exciting new things and economic growth are happening elsewhere, not in Russia.I wonder if they understand why. I should ask them.

To be happy with Pence insinuates that Pence is better than Trump across the board. Since Trump has set the bar so low, "better" doesn't mean much, if anything.Sure, Pence wouldn't throw temper tantrums - he'd act in a mature and measured way.However, Pence is the most conservative Vice President (and running mate) since 1976: [1][1][1][1]His average score, 60, is higher (more conservative) than any other Republican vice-presidential nominee since 1976.Additionally, it’s higher than any of the other candidates that Trump was supposedly choosing among:Gingrich averaged a 49Christie a 22Pence has described himself as being: [2][2][2][2]“a Christian, a conservative and a Republican, in that order.”Why is that concerning?It's concerning because it shows how Pence makes decisions:He has often put faith first in his political decision-making.Christian conservatives cheered when he:signed one of the strictest abortion laws in the United Statesrooted for him as he defended a religious freedom law that companies across the country decried as a gateway to discrimination against LGBT people.Pence places his religious beliefs before the U.S. Constitution - Pence has more in common with theocrats than he does with western leaders (prime ministers, Presidents, etc).The fact that Pence does not believe that in a separation of church and state brings up a variety of issues:Anti-Science: [3]Pence wants creationism taught in schools.Climate Change Denier: [4]Tried to block various EPA regulationsMike Pence’s “faith” also does harm to women and the LGBTQ community, which is covered below.Here's a brief summary of Pence's career/background: [5][5][5][5]Pence is a movement man, with a personal agenda.Two years after finishing law school at Indiana University, he was campaigning for Congress.And losing.And losing.After those 1988 and 1990 defeats for a House seat that combined rural and urban counties and was then represented by Democratic Congressman Phil Sharp, Pence attached himself to the “state-based free-market think-tank movement” that corporations and the Koch brothers have used to advance their agenda.As president of the Indiana Policy Review Foundation, Pence was associated with the State Policy Network that has sought to develop what Ronald Reagan allegedly referred to as “something like a Heritage Foundation in each of the states.”That gig gave the ambitious but unsuccessful congressional candidate the connections he needed to become a right-wing talk-radio host—The Mike Pence Show was syndicated across Indiana at a time when Rush Limbaugh and other stars of conservative media were making talk radio the dominant means of communications for a new and more rigid right.To this day, Pence is a Limbaugh loyalist…Pence declared, “I don’t believe Rush Limbaugh has a racist bone in his body. If you’re suggesting that his statement had a racist element in it, I commend you to a greater understanding of the positions he’s taken. He’s a man about opportunity of all Americans, regardless of race, creed, or color. That’s why he’s so admired and appreciated across America.”Always on the make, Pence parlayed his “think-tank” and talk-radio connections into a Republican nomination for Congress in 2000, won the seat, and quickly began angling for positions of authority in the House.He was a steady vote for the foreign and domestic policies of President George W. Bush and Vice President Dick Cheney.Pence bid for the post of House minority leader in a 2006 race with eventual Speaker John Boehner, but earned only 27 votes from social-conservative stalwarts and other hardliners.In 2009, Pence was elected to the third-ranking post in the House, Republican Conference chairman. But he quickly began making noise about running for an Indiana US Senate seat.Then he repositioned himself for a 2012 gubernatorial bid, which he won.A single controversy-plagued term has seen Pence promoting:religious-right agenda itemsincluding a “Religious Freedom Restoration Act”designed to permit discrimination against members of the LGBTQ community that provoked widespread outrage and had to be rewrittenpicking on:refugeesimmigrantslabor unionslocal schoolstrying, without success, to set up a taxpayer-funded state-run news servicecritics described as “the Pence News Service”one Indiana editor dismissed as “antithetical to the idea of an independent press.”Pence is anti-women: [6][6][6][6]Pence cut budget funding for Planned Parenthood in Indiana - this didn't just hurt women.Defunding Planned Parenthood forced five Planned Parenthood clinics to closeThose five clinics that closed provided HIV testingA HIV epidemic ensuedThe CDC investigated the epidemicfound that the fact that needle exchange programs in Indiana were illegal was contributing to the spread of HIVPence refused to legalize needle sharing state widePence only allowed the county experiencing the biggest HIV epidemic to have onethe other counties have to go through a rigorous process to get permission to have a needle exchange programmany of these counties simply didn't have the funds to do so.If planned parenthood hadn't been defunded, they could have helped prevent much of the HIV epidemic.Pence said the following about Planned Parenthood: [7]If Planned Parenthood wants to be involved in providing counseling services and HIV testing, they ought not be in the business of providing abortions.As long as they aspire to do that, I’ll be after them.I'm sure this is no surprise, but Pence tried to defund Planned Parenthood in its entirety even though the federal government doesn't not provide one dime for abortions: [8]Representative Mike Pence of Indiana, a Republican and a longtime foe of abortion who is the chief sponsor of a House bill to cut off financing for Planned Parenthood, said that the organization had “a pattern of apparent fraud and abuse” and that “the time has come to deny any federal funding to Planned Parenthood.”These calls to completely defund Planned Parenthood from Pence were based on the now infamous edited video that the anti-choice group “Live Action” put together.Pence said this about Roe vs. Wade: [9]I long for the day that Roe v. Wade is sent to the ash heap of history.Pence voted against: [10] [11]The Lilly Ledbetter Fair Pay Act (equal pay for women) 2 times (2007)The Paycheck Fairness Act once (2009)Paid parental leave 4 timesthe U.S. is one of the three countries that doesn't provide some kind of paid parental leave, according to UN data. [12]What countries don't provide paid parental leave besides the U.S.? Oman and Papua New GuineaPence tried to re-define rape so he could restrict women's access to abortions. [13]In fact, Pence believes that rape and incest aren't even reasons that abortions should be legal.To top it all off, here is one of the most ridiculous quotes from Pence about women: [14]Pence is anti-LGBTQ: [15]Pence said in his speech, "societal collapse was always brought about following an advent of the deterioration of marriage and family."Pence also called being gay a choice and said keeping gays from marrying was not discrimination, but an enforcement of "God's idea."The Employment Non-Discrimination Act would have banned discrimination against people based on sexual orientation.Pence voted against that law in 2007 and later said the law "wages war on freedom and religion in the workplace."Pence said this about Marriage Equality (from his 2000 campaign website): [16]Congress should oppose any effort to put gay and lesbian relationships on an equal legal status with heterosexual marriage.Congress should oppose any effort to recognize homosexuals as a “discreet and insular minority” entitled to the protection of anti-discrimination laws similar to those extended to women and ethnic minorities.Conversion Therapy: [17]During his first run for Congress, Pence suggested that federal money used to fund research on HIV/AIDS should instead be diverted to programs that "provide assistance to those seeking to change their sexual behavior."So-called "conversion therapy" is a controversial procedure that attempts to change the sexual preferences of gay and lesbian individuals. It is a practice that has been called out by the American Psychological Association as having no basis in medical fact, adding there is "insufficient evidence to support the use of psychological interventions to change sexual orientation."Several states have already moved to ban the practice.Pence’s long history of opposition to the LGBTQ community shows a scary trend: [18]Pence has staunchly opposed LGBT rights since the 1990s, when he was a board member for the Indiana Family Institute (IFI), which advocates for “religious liberty” and opposes what it calls “so-called same-sex ‘marriage.’”Pence is still closely connected to IFI and regularly speaks at the group’s events. During his 12-year tenure in Congress, Pence opposed:workplace nondiscrimination protections based on sexual orientationefforts to expand the definition of a hate crime to include crimes based on sexual orientationchampioned a federal constitutional amendment defining marriage as the union of a man and a womanopposed the end of “don’t ask, don’t tell.”Pence is pro - mass incarceration: [19][19][19][19]In the spring, Pence signed into law an Indiana House bill imposing 10-year mandatory minimum prison terms for people convicted of second offenses for crimes involving methamphetamine or heroin.The legislation was opposed by the Indiana State Bar Association’s Criminal Justice Section, the Indiana Judicial Conference, and the Indiana Public Defender Council, which all argued that legislation to combat drug use should focus on treatment rather than harsher punishment.Pence is bad for the economy in Indiana & Worker rights. [20][20][20][20]“Trickle down” economics:In March 2014, Pence followed the lead of other Republican governors around the country by passing a package of supply-side corporate and income tax cuts that he claimed would increase business activity and economic growth in the state.Similar trickle-down economic models “collapsed” after being implemented by Govs. Sam Brownback (R-KS) and Bobby Jindal (R-LA) and failed to produce discernible results for Gov. John Kasich in neighboring Ohio.As was the case in Ohio and elsewhere, Pence’s tax cuts effectively redistributed the state’s tax burden onto local governments that were stripped of nearly $1 billion in annual revenue.Minimum Wage:2013, Pence mustered Republican State House opposition to a proposal that would have increased Indiana’s minimum wage to $8.25 per hour despite national support for raising the wage to $9.According to The Times of Northwest Indiana, Pence had previously signed legislation “prohibit[ing] local governments from requiring businesses [to] pay a higher minimum wage, or offer any working condition or benefit, such as paid sick leave, if it's not mandated by state or federal law.”On May 6, 2015, Pence continued his campaign against living wages by repealing a law guaranteeing that “prevailing wages” be paid to workers on publicly funded construction projects.Right to Work:Since being revived in Indiana, anti-union “right-to-work” laws have spread throughout Republican-controlled statehouses around the country.Pence’s support for legislative crackdowns on worker rights and collective bargaining date back to at least 2003, when he was an initial co-sponsor of the National Right-to-Work Act.In June 2016, Pence promoted his state’s experience with the law while praising Republican gubernatorial candidate Bill Cole in union-heavy West Virginia.Conservative media outlets have intensely promoted “right-to-work” since it re-emerged on the national stage in 2012 as a means of boosting wages and economic activity, but research by the Economic Policy Institute (EPI) has consistently shown that the supposed gains never actually materialize.These are just some of the reasons why Pence scares me no less than Trump scares me.Trump is like a blubbering drunk that is terrifying because he doesn't care who he kills on the road; if he plows people over it makes no difference to him.Pence is a different kind of danger.Pence wants to plow you over when he's stone cold sober. Trump doesn't avoid it, but Pence aims.Trump is a parasitic evil, Pence is a calculating one.Trump is a gross bug, Pence wants to squash you like a bug.Trump has no depth, intellect or ability to think critically, but Pence thinks critically on how to make marginalized groups less free.Trump is reckless because he only cares about his narcissistic supply being refilled, but Pence wants to eliminate equality for those who are not white, heterosexual, cisgender men because Pence thinks doing so is ethical.Trump doesn't care about morality, but Pence genuinely believes that he is fulfilling “god’s” work by annihilating the progress oppressed groups have made in the U.S.In other words, Pence views equality as a threat and he will stop at nothing to destroy his perception of that threat.This makes Pence a very scary evil indeed.Footnotes[1] Mike Pence Is A Really Conservative And Mostly Unknown VP Pick[1] Mike Pence Is A Really Conservative And Mostly Unknown VP Pick[1] Mike Pence Is A Really Conservative And Mostly Unknown VP Pick[1] Mike Pence Is A Really Conservative And Mostly Unknown VP Pick[2] By picking Mike Pence, Trump sends conservative evangelicals a mixed message[2] By picking Mike Pence, Trump sends conservative evangelicals a mixed message[2] By picking Mike Pence, Trump sends conservative evangelicals a mixed message[2] By picking Mike Pence, Trump sends conservative evangelicals a mixed message[3] Fact Check: Science And The Trump Administration[4] What Media Should Know About Trump’s Reported VP Pick, Indiana Gov. Mike Pence[5] Trump Pick Pence Is a Right-Wing Political Careerist Who Desperately Wants Out of Indiana[5] Trump Pick Pence Is a Right-Wing Political Careerist Who Desperately Wants Out of Indiana[5] Trump Pick Pence Is a Right-Wing Political Careerist Who Desperately Wants Out of Indiana[5] Trump Pick Pence Is a Right-Wing Political Careerist Who Desperately Wants Out of Indiana[6] As Indiana Governor, Mike Pence's Health Policy Has Been Contentious[6] As Indiana Governor, Mike Pence's Health Policy Has Been Contentious[6] As Indiana Governor, Mike Pence's Health Policy Has Been Contentious[6] As Indiana Governor, Mike Pence's Health Policy Has Been Contentious[7] Pence's war on Planned Parenthood[8] Planned Parenthood Funding Is Caught in Budget Feud[9] Meet Trump’s apparent VP pick, a ferocious warrior against reproductive rights[10] Mike Pence's Positions on Women's Rights[11] Mike Pence, Vice President of the United States (and President of the Senate)[12] US Is Still Only Industrialized Nation Without Paid Maternity Leave[13] Elections Matter: Why Pence Is A Scary Option For Women And Public Health[14] Mike Pence in 1999 op-ed: Disney's "Mulan" is liberal propaganda[15] Here's What Mike Pence Said on LGBT Issues Over the Years[16] Mike Pence for Congress[17] Here are some of Mike Pence's most controversial stances on gay rights, abortion, and smoking[18] What Media Should Know About Trump’s Reported VP Pick, Indiana Gov. Mike Pence[19] What Media Should Know About Trump’s Reported VP Pick, Indiana Gov. Mike Pence[19] What Media Should Know About Trump’s Reported VP Pick, Indiana Gov. Mike Pence[19] What Media Should Know About Trump’s Reported VP Pick, Indiana Gov. Mike Pence[19] What Media Should Know About Trump’s Reported VP Pick, Indiana Gov. Mike Pence[20] What Media Should Know About Trump’s Reported VP Pick, Indiana Gov. Mike Pence[20] What Media Should Know About Trump’s Reported VP Pick, Indiana Gov. Mike Pence[20] What Media Should Know About Trump’s Reported VP Pick, Indiana Gov. Mike Pence[20] What Media Should Know About Trump’s Reported VP Pick, Indiana Gov. Mike Pence

I have the perfect answer for this — it’s one that Democrats AND Republicans should support. It supports existing obligations, provides for people to be better off in the future, reduces government liability AND increases tax revenues. I’ve talked to dozens of people about it, tweaked it, and would love to see a policy paper on it. (I’m sure there are dozens of ways to improve on it). The general outlines are described below.Of course this means it will never be implemented, but my cynicism aside, here is the way to save social security and improve retirement in this county.First, make it clear no one loses their benefits. If anyone over the age of 18 wants to stay in social security, as is currently structured, they can. However, all citizens will have to either opt in or opt out within one year of the change. You can always opt out in the future, but once you opt out of what I’ll call “Traditional Social Security,” you cannot opt back in.If you opt out, you forfeit all money paid into social security. I don’t care what age you are, if you’ve paid in $1, or if you’ve paid in $1m. If you opt out, your money that you paid in becomes the government’s to pay out to those who decided to opt in to Traditional Social Security.I wish I could trust my fellow American’s to save for retirement, but I can’t. A fact that’s been repeatedly proven. So if you opt out, you still have to save. Specifically, ten percent of your paycheck. (That ten percent includes the current employer contribution). Given the current combined rate is 9.8% between employee and employer, that means people are having the same amount put into savings.Everyone who opts out will be given the opportunity to invest in the following:The “default” plan, which would look something like a conservative Vanguard age based plan (I have huge complaints about age based plans, but that’s another discussion). For those under 50, such plan would look like: (i) 10% into US government bonds, (ii) 15% into high grade corporate bonds, (iii) 25% into US large cap stocks (S&P 500 and the like), (iv) 25% into small and mid-cap stocks, and (v) 25% into large cap foreign stocks. If the individual does not pick a plan, it will go into the default plan;A more aggressive plan for those under 50 that eliminates the government bond investing and replaces it with REITs or other such investments;For those over 50, more government bonds.At least three companies would provide the brokerage services. It’d look like a lot of 529 plans, with very low fees (in fact, you might could get a no-fee one, just due to the amount of assets being invested). In any case, fees would be measured in basis points and companies would FIGHT tooth and nail to be government approved provider. We’ll call these “Private Social Security.”Here’s the kicker — Private Social Security is not a tax benefited account like an IRA. It is taxed as if it was a normal investment account. Dividends are taxed at dividend tax rates, if you switch between lineups and incur capital gains taxes, they are taxed as capital gains. When you retire, and start living off the amounts saved, the gains in the portfolio are taxed at the long term capital gain tax rate.When you die, 100% of your Private Social Security goes to your spouse. When you both die, half goes to the government to pay down the national debt. Once the national debt is paid off, 100% goes to your heirs of your choice, taxed at the then current long term capital gains rate. Your heirs have to put at least half of what they received into their Private Social Security accounts. They can do whatever else they want with the rest.Even with the higher taxes, pretty much everyone under 45 will be better off opting out and into Private Social Security.And here’s the best part — tax revenue to the government would increase within ten years and most likely a much shorter period. In other words, the government is paying out less AND bringing in more.I look at client social security statements all of the time. Virtually no one will recover what they put in, much less getting a positive return. For instance, I just completed a financial plan for a client, let’s call him “Bob.”Bob was born in 1956 and is 63 years old. He has not started collecting benefits yet, as he would prefer to wait until full benefits kick in. Once his full benefits kick in at age 66, his current estimated monthly payment is $2,691/month. His life expectancy, based on health and our conservative calculators, is 89. That means his total expected payout/benefit over his life is $548,964. If he optimizes he and his wife’s withdrawals (by deferring his benefit to age 69 and 11 months and his wife deferring her benefits until age 71 and 11 months), then that can be increased to $750,792 in payouts over his expected life.However, he and his spouse, over their entire working lives, paid in just over $800,000 into the system. Over a 50 year period. So their collective “investment” into their social security retirement LOST 6.25%. That’s pretty much impossible for any half wit investor.Let’s say instead that they, over that same 50 year period, they had invested the same $16,000/year into “Private Social Security” instead of Traditional Social Security. We know exactly how much that would be worth, as we have past market returns. If they had used a comparable portfolio to Option 1 above, they would have averaged a 7.5% annual return. Which means instead of $750,000 in benefits, they would have$8.3 MILLION DOLLARS in their Private Social Security Account.Accounting for taxes on everything, this falls to just under $7m.With Traditional Social Security, Bob and his wife get $37,500/year and when they die, there is nothing left.With Private Social Security, at a 4% withdrawal rate, they get $280,000/year and will die with a balance in their account of close to $9m (yes, they are withdrawing a quarter million dollars per year AND their balance keeps going up).Also, instead of having paid $800,000 in Traditional Social Security taxes, over the same period, they’d have paid close to $1.5m in Private Social Security taxes. And when they die, the government would get an additional $1.6m.In other words, instead of receiving $800k from Bob and his wife in taxes, they government would have received $3.1m — more than triple. And Bob would be happy to pay it because he’s #*($&$ RICH NOW.The other benefits to this are incalculable. To say the economy would take off is an understatement. You’ve increased the amount of capital money flowing into the markets by one trillion dollars per year in the first year alone. As investments grow, this will increase by even more. This growth results in even higher tax revenues to the federal government, which can be used to pay off the debt and stabilize disability and medicaid.Within 20–30 years, as no one opts in anymore, Traditional Social Security will naturally phase out.For the first 10 years or so, there will be fairly large deficits run as, after opting out, the amount of people paying in dramatically drops. But that will be made up in spades over time. I’m perfectly happy temporarily increasing deficits to eliminate long term liabilities.Every time I talk to an elected representative about this, it becomes clear that none of them want to change the system. They’re too invested in it. They don’t want to give up control over retired people — think about it — right now any politician that hints at changing social security is voted out of office, and the “candy” of increasing benefits is a great political football.I have yet to hear a rational argument against this. Of course there are implementation issues. Yes there will have to be oversight of the firms managing Private Social Security. Yes the temporary deficit increase will have to be accounted for and resolved. Yes there will have to be a way to help those who are below the poverty line (though I’d like to point out, that even if you only earn minimum wage your entire life, you would STILL have over $1m in Private Social Security when you retire, which is infinitely better than minimum wage).But under this system everyone gets richer. Minimum wage employees escape poverty and retire with over $1m. Middle class workers retire with millions. The economy explodes. The government tax revenues go through the roof over time.I am sure that people a LOT smarter than me can see holes in the above, and if so, by all means, lets address them. But the general concept of phasing out Traditional Social Security for Private Social Security benefits everyone.