Social Security needs tweak, not privatizingHere is my (unpublished) commentary:
Remember back in 1994 when Republican Newt Gingrich stood on the Capitol steps with the Contract With America? We had a Democrat in the White House and there were five balanced budgets in a row. The national debt was $3.5 trillion, with a projected surplus.
Now, with a Republican administration, we have a $400 billion deficit with a $7.5 trillion national debt. Where, oh where, is Gingrich now?
Our Medicare has been severely bruised and tilted toward drug companies. Social Security is next on the agenda. I have heard President Bush ridicule the one- to two-percent interest on the trust fund. Not true. The lowest paid from 1970 to 2000 was 5.63 percent. The high was 13.33 percent. There were only four years in which it was less than 6 percent.
Social Security is projected to run out in 2052. There are two ways to fix it. Put the lock box on it as Bush promised in 2000. Don’t spend it on the general fund. Raise the $83,400 cap on taxing it. Replace the IOUs in it. Don’t spend trillions to privatize it.
Mr. Edward LaSage wrote on Monday that Social Security's pay out was never less than 5.63%. This is true...for TODAY'S retirees. The 1-2% return scorned by the President is projected for TODAY'S workers when they retire. Sure, Social Security has a nice return for those receiving it now, but before long it won't be, not with fewer and fewer workers supporting more and more retirees.
I agree that Social Security receipts should not be available for the general fund as they have been ever since the program was inititated in the 30s. But the Supreme Court has already settled that question: Social Security receipts may be treated as general tax revenue to be used for any purpose; and Congress may raise, lower, or eliminate SS benefits at its discretion. There goes the "lock box."
Mr. LaSage suggests that we "replace the IOUs" in the Social Security trust fund. Sounds so simple, doesn't it? Redeem the government bonds that are in the "Trust Fund" with actual money that can be paid to SS recipients. The Clinton administration's fiscal year 2000 budget explained that the Trust Fund balances "do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits."
In other words, our retirement account savings have been spent already on weapons for al Qaeda to fight the Russians, for Saddam Hussein to fight the Iranians, and on research into fur-bearing trout farms for all we know. But there's all o' them government bonds in there! Yessir! That's money, isn't it? Well, no, we have to pay for our own retirement AGAIN plus interest to redeem those bonds.
Do you know what that would be called if a business did that with its employee pension fund? Fraud. And lots of people would go to jail.
Now do you see why Mark Twain called Congress our only native criminal class?