Letters

Social Security is not in need of re-hashing

Your August 6 editorial, "Revamping Social Security," states a need for "Voters to demand more details and debate" from Bush and Kerry on the best way to resolve the federal pension system's imputed problems. But your data suggest an easier path: Do nothing.

You note workers tend to prefer Social Security's greater safety and point out the realistic hazards of Bush's individual retirement account proposals. You say Social Security benefits can be paid in full until perhaps 2052 and 80 percent thereafter, and that the start-up cost of the Bush plan would be $1 trillion.

Doesn't this suggest doing nothing for maybe 30 years? If a problem develops, you can then ask how to raise the sums needed to cure any deficit. It is likely $1 trillion will be more than enough, and it would go to pay valuable benefits rather than wasted start-up costs for the Bush plan.

Social Security has a proven track record, while privatization has created costly problems in Sweden, England and Chile.
David Langer
New York
Consulting Actuary

The current sentiment seems to be that Social Security is in better shape than it was a few years ago because the "go broke" year keeps advancing.

But hold on: As Longfellow once wrote, "things are not what they seem." Each year the Social Security trustees publish a report showing the current projections. As an example, back in 2001 the report estimated that there would be $4.6 trillion in "assets" in the trust fund in 2014. But "assets" is really a misnomer, because virtually all of these "assets" count toward the national debt; they're IOUs that the next generation will have to redeem somehow.

Even if the 2052 date is accurate - which it isn't - the tables in the current trustees report indicate that $56 trillion (not adjusted for inflation) will have to be borrowed or taxed to keep Social Security solvent until that far off date. This comes out to something in the range of $300,000 to $400,000 per full-time wage earner over the next four to five decades. So smell the magnolias while you can.
Michael R. Feltz
Celina, Ohio

Your editorial notes the less than promising results of the Swedish experiment with privatization, but ignores the much longer experiment that took place in Britain from the mid-80s - an experiment that has ended in tears. First, those selling private pensions took advantage of the ignorance of purchasers. Second, privatization revealed cracks in Britain's regulatory apparatus that are still being addressed.

There is no reason to think it would go any better here. How can a public with a low level of math literacy be expected to understand a financial prospectus? Unfortunately, the notion of prefunding public pensions and allowing that money to be invested in financial markets has been confused with creating pensions that would need to be managed by average individuals. While the first idea has merit, the latter promises to create the same mess that the British are still working to clean up.
Pamela Nadash
Brookline, Mass.

Regarding the August 5 article "Task for Olympians: How not to be 'ugly Ameri cans'": Anti-American attitudes toward our athletes is no different from prejudice when it comes to race.

Each athlete deserves to be judged as an individual, not as an entire group, and definitely not as a stooge for our political parties. Yes, Americans should keep low profiles, but simply for safety's sake.
N. McInnes
Gainesville, Fla.

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