USNews.com: Letters: On to the polls

Tuesday, November 24, 2009

How to Make Money the Buffett Way

Smart Money-Saving Tips You Need Now

Best Careers

Best Places To Retire

The Guide to Being a Grown-Up: 20-Something Financial Advice

On to the polls

Four years ago, both political parties stressed the need for legislation to relieve the eventual financial crisis facing Social Security. Four years have passed and nothing has been done. I presume the delay has only made the situation worse. President Bush proposes to transfer a portion of the Social Security taxes to individuals' accounts. These accounts could be invested in equity securities, which hopefully would provide more benefits to the individual. I agree that past long term trends support this probability. However, the economy and the stock market fluctuate, and, depending on our timing or retirement and selection of investments, disappointments may occur. Moreover, the individual can invest in tax-advantaged IRAs if her or she so chooses. My principle objection to the proposal is the effect on the Social Security fund that is already in a precarious position. Siphoning off taxes from the fund for individual accounts would be a big ticket item. While President Bush has touted the benefits of his proposal, I have heard nothing of how he would pay for it. I can visualize several paths. Perhaps the easy one is to increase the large budget deficit. This seems to be popular with all politicians. Another would be to increase the Social Security tax. Another would be to decrease Social Security benefits, or to extend the retirement age. Still another would be to continue ignoring Social Security's problems and let future administrations deal with them. The Social Security system was never intended to make individuals rich. It was intended to give individuals the security of a guaranteed basic income during retirement. The administration should be dedicated to the difficult and long neglected task of providing this security.

DICK SHOTLIFF

Mendota, Ill.