Re: Save Social Security from White House, by Bob Graham, Dec. 26.
Bob Graham writes that Bill Clinton wanted to fix Social Security, Republicans are going to ruin it, and taxing the rich is the answer. Does anyone really believe that we shouldn't have the right to put some of our confiscated savings into the stock market?
Investing in America's economy, via individual retirement accounts, is the best choice for long-term security and is the basis for the reform being proposed by President Bush. Financial analysts are almost unanimous in their agreement that, over a term of 10 years or longer, broad based index funds present the most attractive risk/return profile. They also agree that guaranteed investments, like Social Security, are inappropriate for those with decades of investing ahead of them.
We all know that Social Security is "the third rail of politics," due to the belief that senior-citizen voters will punish proponents of any change. Only one politician in my lifetime has had the courage to face this challenge with concrete action. George W. Bush is demonstrating leadership by following his convictions with economically realistic action. When the fearmongers realize that this is why he was re-elected, then they will begin to understand why they lost the power they had for so long.
Kurt Steinmann, Clearwater
Don't tamper with Social Security
Re: Save Social Security from White House,Dec. 26.
Congratulations to Bob Graham for his wonderful article on why Social Security does not need to be privatized. He explains clearly how Social Security can remain solvent with reasonable changes. We must all resist tampering with a program so important to American workers.
Harvey Morgenstein, St. Pete Beach
Privatization makes sense
Re: Save Social Security from White House.
Sen. Graham's column on Social Security is full of holes. He suggests that Social Security reformers are interested only in weakening Social Security's guarantees. In fact, the current system will eventually not be able to pay its obligations, as Graham admits. He says that as of 2052 the system will only pay 80 percent of its obligations. So those who stand in the way of Social Security reform are actually advocating its eventual default.
He objects to the "risky" nature of personal accounts. While it is true that unwise investors would be able to lose all of the money they put into such accounts, this is not the whole story. Personal accounts can be restricted to invest only in diversified funds, thus limiting this risk. But the flip-side to the risk of these accounts is the reward of taking such risk. The return on personal accounts would be much greater than that provided by current Social Security payments. In fact, younger workers will get zero or less than zero return on their Social Security contributions. Workers who are my age (late 40s) will get a positive but pretty poor return on our contributions.
For example, I have seen my IRA contributions grow from a few tens of thousand of dollars into hundreds of thousands of dollars since I started contributing 20 years ago. What has happened with the $100,000 or more than I have contributed to Social Security? In a personal account, it would most likely have made me a multimillionaire by now. Instead, I have the meager return that Social Security provides.
And that will occur only if I survive to retirement. The bulk of my Social Security benefit evaporates if I die first, whereas the money in my private retirement accounts will go to my heirs.
Sen. Graham suggests that President Bush is using "fuzzy math," and goes on to praise former President Clinton for talking about saving Social Security. Typically, Graham is praising a president from his party who did nothing but talked a lot, and smears our current president who intends to actually take action to address the problem. Graham clearly prefers words from a Democrat over solutions from a Republican. We are well rid of such a senator who puts words and party loyalty over the well-being of his constituents.
What Graham would prefer is that Congress continue to spend Social Security surpluses, that the federal government be allowed to spend your retirement savings now and rely on future generations to pay for future retirees. The benefit of this system accrues to congressional spenders, not to retirement savers.
If we allow our FICA payments to be invested rather than spent by Congress, it is more likely than not that an American born today would retire a millionaire without paying any more in taxes than current law requires. Think about that.
Robert L. White, Tampa
The Social Security safety net
I think the original philosophy of Social Security has been forgotten. There must be a lot of people who, as I do, remember when President Franklin D. Roosevelt proposed the Social Security Act of 1936. The country was emerging from a great Depression in which many people lost all or most of their savings in the runs on banks.
The reasons are another subject altogether. What the president wanted to do was establish a guaranteed income that a person would have waiting for him at retirement. But it wasn't meant to be a livable income, and he emphasized this. He made a point of telling people to save against their old age. Then, what they saved, coupled with the Social Security income, would provide at least a reasonable retirement pension.
Trouble was, of course, we all looked at Social Security as a full retirement pension. Many of us were not serious enough about saving; hence, the elderly, who have lived much longer than they ever expected, are struggling and barely making it on Social Security.
So, comes an inept president noodling with a system I don't believe he fully understands. It's too late to undo what's been done, but letting people invest some of their Social Security tax money themselves is an idiotic idea. One never hears the president mention that a person trying to do his own investing could lose it all. If that happened to a large number of people, what would it do to the economy?
It might be an idea for the president to work out some kind of required retirement savings plan in addition to Social Security, similar to the 401(k). Under only extreme circumstances would a person be able to dip into it. If you say the government can't force people to save, it's already being done, isn't it? Social Security?
Let's hear some other ideas.
Gene Taylor, Pinellas Park
A long-awaited laugh
Re: Even insults went retro this year.
Thanks so much for Robert Friedman's Dec. 26 column. It's the first good laugh I've had since the election!
Jan Milner, Brandon