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Basic Fact Ignored in Social Security Items

September 22, 1985

"Should Social Security Be Scrapped, Changed?" (Viewpoints, Aug. 18) included three articles. In the first, Edward R. Roybal ("System's Great Success Is Best Argument for It") points out that Social Security provides families with protection against risks that no savings or investment plan could, and for which private insurance would be prohibitively expensive.

Peter J. Ferrara ("A Miserable Deal for Today's Young Workers") explains the Social Security tax rate, which is far higher now than years ago, and the poor prospects for a decent income when they retire.

These factors make Social Security a bad deal for younger workers. Both he and the third author, Daniel F. McGinn ("The Program Is Good, but It Should Be Redesigned to Eliminate Flaws") advocate complex changes in the system.

All these authors have a "blind spot." They ignore one fact that is the basic reason Social Security is a problem. Only when that fact is taken into account can meaningful analyses of the situation and helpful suggestions for the improvement of the system be made.

That fact is the difference between insurance programs run by the government but paid for by the participants, and government expenditures for the needs of people who cannot pay their bills. Social Security at its inception fell into the first category; it was a retirement program paid for by people who, upon retirement would themselves draw benefits from it.

Social Security has since been decorated like a Christmas tree with obligations that fall in the second category. This is what made horrendous increases in the Society Security tax rate necessary.

I am not saying that payments in the second category should not be made, only that they should be entirely separate from Social Security. Whether they are paid for out of general revenues or some other system is created, they are a fundamentally different kind of government outlay than Social Security.

If Social Security was returned to what it was at its inception, a retirement program, it would be financially sound and Social Security taxes could probably be decreased. Only then could the need for changes be determined. It just might be that none would be necessary.


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