Re "Some Find Strong Pulse in Social Security," Dec. 12: Those seeking radical restructuring of Social Security use the word "bankruptcy" to mean that the day will come when the program's trust fund will be exhausted and its earmarked tax revenue will be insufficient to pay all entitlements. By that definition, the military is bankrupt today. We spend about $500 billion per year on the military, including veterans' payments. Yet the Pentagon has no earmarked tax revenue and no trust fund. If our indefinite entitlement to national defense were treated analogously to Social Security, the Pentagon's "unfunded liability" would be on the order of $15 trillion to $20 trillion -- that's trillion! Yet no calls for radical restructuring of the "bankrupt" military are heard.
Daniel J.B. Mitchell
Professor of Management
and Public Policy, UCLA
Is the "looming danger" to the Social Security system, now being proclaimed by George W. Bush, the same kind of looming danger exemplified by Saddam Hussein's stockpiles of weapons of mass destruction in February 2003? Is it really possible to fool all of the people all of the time?
Robert H. Hethmon
Bush is intent on privatizing Social Security, and I wonder if he or his advisors have given any thought to what this will do to the stock market. Privatizing means that individual investors will be looking for some place to put their money and, with savings accounts paying so little, there will be billions and probably trillions of dollars suddenly being invested in the stock market. A bubble will be created that ultimately will have to burst.
If anything needs fixing, it is Social Security. It is a classic Ponzi scheme, which would be illegal for anyone else.
The retirees, who bought in earlier, are now being paid by the latest entrants into the game and, like all Ponzi schemes, the late arrivals will not be paid off when the money runs out. It is a wealth transfer plan for the poor and middle classes to subsidize the elderly regardless of need. The tax is regressive because of the income cap, which means that workers who earn more pay less as a percentage of income; those who earn less than the cap pay the full rate.
It will be painful to make the transition to a privatized plan, but it will be much worse to wait. Sadly, younger workers will receive much less than they will pay into the system because they are getting into the Ponzi game when it is about to go broke!
A. Trujillo Escareno
It seems a little strange that Bush is pushing privatization of Social Security even before identifying how serious the problem is and the merits of all the alternatives. The president is so committed to privatization that he ignores the additional trillions of dollars in deficit spending privatization will require.
Given Bush's fiscal irresponsibility and the huge deficits of his first term, it just seems foolish only to consider a plan that requires more and more deficit spending. It seems to me that Bush's deficits have to be brought under control now, or it really won't matter what we do about Social Security in the future.
It is not necessary to "raise" the rate of the Social Security tax to "save" the system. All that needs to be done is to raise the income ceiling for those who pay the tax. If it were raised it to $150,000, all this talk about the system going bankrupt would go away because it would be healthy for more than the next 100 years. Such a move would also take a large chunk out of our present deficit.
Given a choice between cutting benefits on people who desperately need the money or increasing taxes for high-income fat cats, Bush is deciding to penalize the poor to placate the rich. What a guy!
Marina del Rey