National Public Radio recently reported on public ignorance of Social Security. According to an AARP poll a large portion of the public doesn’t understand how Social Security works, its benefits, when and how to claim benefits or what the truth is regarding the program’s financial problems.

AARP says 36% of respondents incorrectly believe that in 2032, when the trust fund is depleted, Social Security will be unable to pay any benefits. Only 34% understood that payments will continue but at a reduced amount.

If Congress fails to act in the next six years, benefit payments could be reduced by as much as 22%. When the trust fund’s current surplus is depleted, incoming payroll deductions would be able to continue paying benefits but only at a reduced amount. This would be extremely damaging to most recipients and to the economy.

In total 75 million people currently receive monthly payments from one or more Social Security benefit programs (55.4 million people are retirees, 8.1 million people disabled, 5.8 million receive survivors benefits and 7.4 million people are so poor they receive Supplemental Security Income). About 4 million of these recipients are children.

But the financial problems with Social Security are getting almost no attention from the candidates (especially Republicans) on the ballot in November.

Given that 20% of our people will be directly impacted and everyone else will eventually be impacted (even the very wealthy who don’t need Social Security will be hurt by the general economic decline), why is this not a major campaign issue?

The demographic and actuarial problems have been known for decades. The baby boomers have all been retiring and payroll contributions have been declining.

For decades our political leadership has refused to seriously address these problems. The last effort was in 1983, when the normal retirement age was raised to 67 in an attempt to a ”fix” the problems on the backs of recipients.

The Republicans want to privatize the program, turning it into individual accounts and exposing people to the volatility of the financial markets. Most people would be much worse off but the financial services industry would profit handsomely.

Democrats want to increase the cap on contributions (which currently ends deductions for income more than $184,500). This would help but is not a permanent solution nor politically possible with Republican in control of Congress.

Tax increases of any kind are anathema for Republicans. Budget and financial problems are always addressed by cutting funding and services and never increasing revenues.

  Nick Hanauer is a wealthy venture capitalist I have often quoted on economic issues. In his “Pitchfork Economics” podcast, he, and his expert guests, explain why our current “neoliberal” economic thinking is wrong.

“Trickle down” economics doesn’t work because it is based on untrue assumptions. Wealthy investors don’t drive the economy. It is the prosperity and spending power of the middle class (broadly defined as all working people) that produces a healthy, sustainable economy. Mr. Hanauer calls this “middle out” rather than top down economics. It is essentially Paul Wellstone’s maxim that “We all do better when we all do better.”

An aside: “neoliberalism” is neither new nor liberal. It is a political and economic ideology that promotes free-market capitalism, deregulation, privatization and a small role for government.

This is standard, conservative Republican ideology. It is has been the dominant economic thinking for roughly 5 decades and, too frequently, has been espoused by Democrats.

Two weeks ago I reported that Nick Hanauer has a plan to fix Social Security’s financial problems. He explains his proposal in a YouTube video titled “Why Social Security Is Under Threat.”

This article discusses his proposal in detail.

The plan would permanently fix Social Security funding while increasing most workers take home pay, helping businesses of all sizes and stimulating the economy.

Sound too good to be true?

Well, it isn’t because Hanauer’s plan relies on a dirty little detail about Social Security funding that most people don’t know and no one else – to my knowledge – has ever discussed in connection with a solution.

Social Security payroll deductions – the revenue stream that created the trust fund and paid the benefits – has only been collected from wage and salary income. All other personal income was not taxed.

People who are wage earners pay 6.2% of gross earnings (with a 6.2% match by their employer) on every dollar earned of wages and salaries (up to the cap). People whose income comes from interest, dividends, capital gains, profits from selling stocks or real estate or business profits pay nothing into Social Security from that income.

The majority of income for very wealthy people comes from these investment sources and is not taxed for Social Security. So raising the cap would increase revenue but is not a comprehensive solution.

Hanauer’s plan proposes comprehensive changes to the funding system to “update a tax structure that was designed for 1935 and has never been rewritten for the economy we actually life in.”

Hanauer’s plan would:

1) tax all personal income equally,

2) completely eliminate the cap on payroll deductions,

3) cut the total Social Security payroll tax in half by continuing the 6.2% employer contribution but eliminating the employee portion. This would give 95% of people an ongoing 6.2% raise. Most working people would spend this additional income fueling the overall economy and benefiting businesses of all sizes.

According to Nick this “prosperity feedback loop” is not “charity, it is a growth policy.”

Hanauer says with this plan, “Every dollar of income, however it’s earned, contributes equally to the collective insurance that underpins retirement security for every American... for wealthy people, like me...this means going from paying nothing on most of what we earn to paying 6.2%...that change alone permanently secures Social Security’s finances...We don’t cut benefits. We don’t raise the retirement age. We don’t expose Social Security to privatization schemes...”

Everyone of every age should watch this video. There are realistic options for fixing the financial problems with Social Security.

But finding solutions requires political leaders who care and are willing to act. Given that over 50% of representatives and 73% of senators are millionaires, this will not happen without a change in leadership.

Given that most Republicans ideologically oppose Social Security and have frequently voted to cut benefits or privatize it, ending Republican control of Congress is essential.

Vote for your own best interests this November. Vote for who candidates who will support and fix Social Security.