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- Subscribe - Contact Us - Rate Card - Place an Ad Archives Revels Classifieds Real Estate Menu Guide Wedding Weather Subscribe Contact Us March 14, 2005 Think carefully before cutting SSI By Hal Cloer Ashland To Sen. Gordon Smith: The two issues of the solvency of the Social Security program and that of private accounts must be dealt with separately. Private accounts do not solve the solvency issue; thus governmental assistance in establishing private accounts is a separate issue. The solvency issue appears to be a fairly straight forward fiscal issue, and there are many suggested solutions that appear quite feasible. The call from representatives of the Cato Institute, the Heritage Foundation, and the American Enterprise Institute for private Social Security accounts promises to produce extensive ideological debate that would do nothing to advance solvency of the Social Security Program. Since money leverages money and power leverages power, the endpoint of a completely unfettered "free market" is a relatively small monied oligarchy and many much poorer people. A nation is best off if people are fully functioning and fully contributing, and to approach that situation requires adequate public investment in education, health services, and other adversity-mitigating services - and fiscal policies that make that possible. The proponents of private Social Security accounts have successfully fought investments in the refinement of human resources, and in recent decades the gap between rich and poor in the U.S. has grown. Social Security is one program aimed at putting a floor on poverty that has been remarkably successful, and it would be foolish to abandon it. Many economists claim that the U.S. has a general fund crisis, not a Social Security crisis. Robert Rubin is quoted as saying that the exploding deficit (costs of $2 trillion in the first decade and $4.5 trillion in the second) would have an adverse effect on interest rates and on consumption and housing prices, reduce productivity and growth, and crowd out debt capital in the private sector. Markets could begin to lose confidence in fiscal policy, and the soundness of Social Security would worsen even more. It's troublesome that some of the proponents of private Social Security accounts look forward to such a situation, because it would limit investments in education, health services, and other public attempts to help people become fully functioning and fully contributing citizens. AARP quotes the CEO of the British National Association of Pension Funds as saying "in looking for a system that offers the best combination of modest guaranteed retirement benefits and low cost, the U.S. Social Security Program seems the best model." In 2004, 500,000 Brits abandoned private pensions and moved back to the traditional government plan. AARP has two recommendations for restoring solvency to Social Security: (1) Restore the total wages taxed by Social Security to 90 percent of nationwide earnings - phased in over a decade, and; (2) diversify fund investments to get a higher return (noting that Sweden has found that their government-managed fund outperformed the average retiree-managed portfolio). Since much of U.S. income comes from investments rather than wages, and since there's concern that dependence on payroll taxation depresses consumption and limits employer productivity, perhaps Social Security funding should be shifted from a dedicated portion of payroll to a dedicated portion of income - broadening support from those actually in "the ownership society." There are other suggestions that would ensure Social Security solvency: Since people in their 60s to 80s get more out of the system than they put in, perhaps it would be fair to dedicate to Social Security the taxes on estates worth more than $3.5 million. And add all new public workers to the Social Security system. Use a more accurate formula to trigger cost-of-living increases. There appear to be many ways to assure the solvency of the Social Security Program. Please avoid the prescriptions of those who wish to do away with a successful program for ideological reasons. DailyTidings.com Home Page Archives | Revels | Classifieds | Real Estate Guide | Weather | Subscribe | Contact Us Copyright 2005 Ashland Daily Tidings and Ottaway Newspapers All Rights Reserved Deep Muscle Stimulator Ceramic Piggy Banks FREE Entertainment Guide Women's & Men's Slippers Accelerate Weightloss Products Backpacks Online Pharmacy Vegas Travel Guide Search Engine Optimization Student Loans Hotel & Airline Reservations Hammocks Water Filter Helzberg Diamonds Online Casinos Community Bonus Casino Mortgage Calculator Security Systems Mailing Lists Click Here Advertisement .:Advertisements:. Site Search: RESOURCES - Mail Tribune News - ODOT Road Cams