Editor: This is one person’s view on the subject of Social Security Private Accounts. Do you agree? Here are the reasons not to institute private accounts:
1. There is no crisis. You be the judge. How many companies, indeed, how many countries can say with a degree of assurance, that they will be in operation through the year 2052? Social Security can pay full benefits through that time. Yes, we need to make minor changes to assure its viability beyond that date.
2. By going to Private Accounts, that does not save Social Security. Even the proponents of Private Accounts acknowledge this.
3. Risk. 1929. Enron. The tech bubble burst of the ’90s. Need I say more?
4. The market cannot be timed. If a retiree needs access to funds during an extended market slump, it’s just too bad.
5. Management fees and commissions. These often consume any gains.
6. The poor house. Before there was Social Security, this is where people went to live when they had no funds. Widows and orphans mostly. Most every county in the U.S. had a poor house, euphemistically called the county home. All sense of independence was lost. (From “The Fiddler on the Roof,” “it’s no sin to be poor; it’s no great honor either.”)
7. Privatizers acknowledge that the emphasis is on retirement planning with private accounts. However, about one in three Social Security recipients are either survivors of lost wage earners, or they are receiving disability benefits. The current discussion does not address this issue.
8. Transition costs. About $2 trillion, according to most estimates.
9. Note: The FICA taxes, which are paid by workers and self-employed, are used for three purposes only; a) to pay benefits; b) to administer the program; and c) the excess is invested in U.S. securities. Those investments have traditionally been paid back (to Social Security), at the agreed upon rate at the agreed upon time. If we the people choose to let the administration not repay them, then we are all guilty of allowing our government to be in default. What then happens to the “full faith and credit of the U.S. Government?” Indeed what happens to our standing in the world markets?
The existing program is arguably the most successful of all social insurance programs. Consider this: 1. duration - benefits have been paid on time every month since 1940. 2. Impact on the economy - 48 million people can depend on their check each month; 3. efficiency of operation - it costs just 1 percent to administer the existing program. There is agreement that that is remarkable and unparalleled. We, the people, have insisted on a well-run program, and we have it. 4. The most important feature is the impact on lives. The writer worked his entire career with the Social Security Administration. To this day,
Social Security recipients often say, “if it were not for Social Security, I don’t know what we would do.”
Don’t take my word for it. Do your own research. The Florida Silver Haired Legislature, the National Silver Haired Congress, the National Committee to Preserve Social Security and Medicare (NCPSSM.org) and AARP can all furnish additional information or knowledgeable speakers on the subject.