$27.9 Trillion Federal Deficit Bolsters Case for ‘Plan for America’ – Founders

The nation’s $27.9 trillion federal debt, which is equal to 99 percent of annual gross domestic product (GDP), is one of the strongest reasons yet why Plan for America (PFA) is the “most viable, long-term solution,” say its founders.

PFA is a voluntary alternative to Social Security and Medicare, that would also eliminate the national government’s debt and state liabilities for pensions and Medicaid.

Terry Nager, Eric Nager, and Kyre Lahtinen updated their plan with new fiscal data. Over 18 years, the three authors have developed PFA, driven by concern about the fiscal stability of the United States. Terry and Eric Nager are principals in an investment advisory firm and Lahtinen is an economist.

The team released a new white paper in June, as well as a list aimed at the presidential candidates on how PFA can benefit every voter constituency. The group has also released details on how private accounts in the PFA can provide a “pathway” to homeownership by serving as collateral for a home mortgage down payment. The use of the PFA account as collateral would not be deemed a taxable distribution under state or federal law.

FAST Accounts

PFA is a public-private partnership that allows Americans to opt out of Social Security and Medicare and direct their payroll taxes into a private account which would be held by a trust named For America Security Trust (FAST).

The FAST accounts would be invested in a broad-based index fund of American-domiciled companies that would pay for retirement, and lifetime health care, including long-term care. Upon death, proceeds in the account could be passed on to designated beneficiaries.

PFA would relieve federal and state taxpayers from the escalating liability in the nation’s entitlement programs that is contributing to the escalating national debt.

“The only thing in the Social Security Trust Fund today are non-negotiable IOUs, so the argument could be made that the system is bankrupt now,” said Eric Nager, during a June 14 webinar.

Pays Off Debt

There are not enough workers to support retirees and none of the solutions to meet obligations are good ones, says Nager. They include rolling the debt over and continuing to borrow, printing more money, or repudiating the debt obligations altogether.

“The best way to handle debt is to pay it off and our plan does that,” said Nager.

“We have to demand the politicians that they are going to get this under control,” said Terry Nager. “Right now, they have no plan, and this gets worse every year. The interest costs eat up more and more of the budget, and we may reach a point where we can no longer sell the bonds.”