The Road Ahead for Social Security
After attending the recent Albuquerque, N.M., forum on Social Security which specifically explored privatization issues, I was dismayed to read the headline "Social Security: How to Privatize?" (July 28).
Certainly dismantling Social Security through privatization is the fervent goal of many conservatives who would be delighted to transfer Franklin Roosevelt's most lasting New Deal program to Wall Street under any pretext. And, while many Republican and some Democrat lawmakers may readily go down the privatizing road, as a nation we certainly haven't reached the decision to privatize our most important, and successful, social program. Before we decide, several facts must be kept in mind during the debate.
First, Social Security is not going broke. Your report of the forum didn't question the inaccurate assumption currently in vogue that Social Security is going broke. Current wisdom is that by doing nothing, Social Security recipients will begin receiving only 75 percent of what present recipients receive starting in about the year 2030. It was always assumed by originators of the 1935 legislation that periodic adjustments would need to be made. In short, there is no "crisis" as we normally use the term.
Second, there are high, hidden costs related to privatizing, especially in setting up individual accounts. It is not at all clear that there will be a net benefit from changing the current low-administrative costs of Social Security to a private-investment system. The increased costs come from higher salaries, stock holder profits and dividends, and marketing expenses.
Santa Fe, N.M.
The article "Beware Privatization" (July 27), puts forth many of the dangers of privatizing Social Security. Possibly the most serious problems of all is the deliberate bias built into the present system that provides higher returns to the poor and disabled with somewhat lower returns to those who are relatively well-off and who have contributed the maximum amount required.
This bias is a needed safety net to keep those less fortunate from falling below the poverty line. It is this bias that allows some opponents of Social Security to argue that it pays some [people] benefits far greater than their contributions while others (usually the rich) argue that they could easily get a much better return through private investment. A privatized system could not easily accommodate this humanitarian element and President Roosevelt's goal of eliminating poverty for the elderly could be seriously jeopardized.
Merritt Island, Fla.
Re "Beware Privatization" (July 27), I read with interest your article about Social Security, and I wonder if you can answer the question, under these plans for privatization, of what will happen to the people who don't have retirement accounts or Social Security.
There are a lot of very poor people out here, such as women who raised their children. As a "boomer," I've long been aware that Social Security is likely to collapse by the time I retire. So I'm curious, what about the many who will fall between the cracks?
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