Social Security Privatization - Easy To Demagogue

Social Security privatization is complicated, and the Bush side has not put forward a specific proposal.  Furthermore, there are sensible objections to the types of plans being floated.  Consequently, it is very easy for a privatization critic to either (a) be confused, or (b) attempt to confuse others.

The NY Times runs an editorial on Social Security privatization today.  Although I hestitate to underestimate their abilities for self-delusion and confusion, my guess is that they have deliberately chosen to terrify rather than clarify.

Even before the debate has truly begun over the centerpiece of President Bush's second-term domestic agenda - creating private retirement accounts within Social Security - White House and Congressional budget leaders have been floating the idea that it won't require a major increase in the federal budget deficit. This is dangerously misguided. Unwilling to raise taxes, Congress and the administration will have to borrow well over $1 trillion to turn the president's wish into reality.

For a country that already needs to borrow $2 billion a day just to stay afloat, that gargantuan price tag for privatization is one reason it's a bad idea.

"Unwilling to raise taxes".  In this context, that is a red herring.  The concept of privatization is that a portion of what the government owes as benefits will be reduced.  In exchange, the government will set aside a portion of current tax receipts in private accounts.  Since those tax receipts had been previously earmarked to pay current benefits, the government must borrow to make up the difference and maintain payments to current retirees.

The net effect is that the government has restructured its liabilities - it owes less to Social Security beneficiaries in the distant future, and owes more to holders of Government bonds (which may be of long maturity.)  Although an increase in payroll taxes may be part of the Social Security solution (Gregory Mankiw, outgoing chairman of the Council of Economic Advisers, has ruled out new taxes), no one is suggesting that Congress ought to raise one trillion in new taxes to cover the privatization transition costs.  In other words, whether Congress is willing to raise taxes or not, significant borrowing will be necessary to fund the transition.

...Yesterday, for instance, the president's top economist said privatization would very likely lead to major benefit cuts, which could be devastating for people who lost money in their private accounts.

If they would read their own reporting, they would understand that benefit cuts are a separate issue from privatization.  Re-indexing the benefit formula to reflect inflation, rather than wage growth, seems like a politically plausible approach.

For now, however, the cost issue is moving to center stage in Washington. It is imperative to refute the suggestion that private accounts would somehow, magically, pay for themselves.

Strawman - what magical suggestion do they have in mind?  Their explanation is below:

The issue is how to pay full benefits to people at or near retirement if Social Security money starts going into private accounts. Since current wage earners cover the benefits for current retirees, every dollar workers invest elsewhere has to be replaced. This is the so-called transition cost, estimated at $1 trillion to $5 trillion.

To convince the public that those costs won't matter, privatization advocates are concocting a ruse something like this: Borrow, say, $2 trillion today to establish private accounts, with the expectation that they'll generate such tremendous personal savings that the government will be able to cut future Social Security benefits by an even larger amount and use the savings to erase the debt, plus interest, some 40 years down the line. By this sleight of hand, the money borrowed is not new debt, and there's no need to count it toward the deficit.

Well.  It seems fair to presume that, if a worker pays 25% of his payroll taxes into a private account, the benefit owed to him by the government should fall by at least 25%.  (And what about the disability component of Social Security?  Ahh!)  In that case, the statutory liability of the government to Social Security recipients really has fallen, presumably by enough to reflect the new (and much more visible) borrowing in the bond market.  The unfunded Social Security liability is not part of the formal debt limit just raised by Congress, but it is surely part of our national indebtedness.  Presenting this in a sensible way is hardly "concocting a ruse".

Remember how Enron used off-the-books maneuvers to pretend it had no debt? Remember how well that worked out?

Be Very Afraid!  Look, if every financial enterprise ended up like Enron, Wall Street would stop.  Both the Times and various politicians are mixing two ideas together - what amount of borrowing is necessary to fund the transition, and how should it be presented?  Politicians are thinking that the underlying economic concept is sound, but the presentation is alarming or too easily demagogued - "one trillion in new debt!".  Their approach is to change the presentation.  Naturally, the Times screams "Enron" to demagogue it anyway.  The Times explains half of this phenomenon:

For privatization advocates who have been stumped by how to pay for the transition to private accounts, this ploy has significant political advantages: creating the illusion that Social Security privatization entails no cost would bolster the case for privatization for an unwitting public. It would also give political cover to legislators and other policy makers who want to be on the president's team but may otherwise balk at the huge deficits that come with playing along.

What accounting gimmickry won't do - and this is crucial - is fool America's lenders, like the central banks of China and Japan, and other participants in the financial markets. Whether it's recorded on the nation's books or not, ever more government borrowing will, sooner or later, reduce lenders' appetite for Treasury debt, forcing up interest rates as the government scrambles to attract the money it needs.

And what editorial gimmickry won't do is fool us (although we acknowledge the possibilty that the Times has fooled itself).  As they astutely note, lenders care about the total indebtedness of the US, and the timing of the obligations.  Formalizing a portion of the long term Social Security liability by replacing it with government bonds is not going to terrify lenders.

What the Times is playing on here is the fact that most government borrowing is a result of deficit spending, and that these deficits are often financing current consumption.  However, in the case of Social Security privatization, the government will borrow a trillion dollars, "give it" to workers (subject to many restrictions), and oblige them to re-invest it in the capital markets.  The net first order impact on our nation's savings will be zero.  The net impact on our government's liabilities will be zero.  This is simply not as scary as the Times would like it to be, but they devote two paragraphs to ignoring the unusual nature of this borrowing: 

This is not a distant and theoretical danger. Last month, Alan Greenspan, the Fed chairman, flatly stated that America's lenders would eventually tire of financing our deficits. Underscoring his comments, the yield on the benchmark 10-year Treasury note hit a four-month high this week, as the ever-weaker dollar continued to lure investors away from dollar-based debt.

The immense additional borrowing envisaged by privatization advocates would accelerate and intensify these disturbing trends, precisely the opposite of what the government should be doing. Trying to hide the borrowing would create the impression - an accurate one, as it turns out - that our government is fiscally irresponsible. The global financial community would respond by upping the pressure because lenders demand tougher terms from feckless borrowers.

The Times does manage to hit on one defensible objection to privatization:

...Second, borrowing to finance the transition to private accounts could very well cost more than doing nothing. If private accounts didn't perform as well as their proponents hope - and the proponents are by and large a very optimistic bunch - the government might need to take on even more debt decades hence to rescue the old people who ended up without adequate retirement income.

I give this a "yes, but".  If a few old folks are struggling to get by on a 75% benefit and the the income produced by some worthless investments, well, hard luck.  The answer (then, as now) is to have some sort of means-tested income assistance for the elderly (and yes, this creates a moral hazard issue by encouraging speculation in the private account).

More broadly, if retiress generally are struggling because the US economy (and hence their investments) has not performed well over the previous thirty or forty years, well, good luck to all of us.  The notion that the consequences of a long term underperformance in the US economy can be waved away by guaranteeing benefits to future retirees is absurd.

Solid accounting must underlie Social Security reform. Once that's in place, let the debate begin.

Well, sure.  But government accounting is currently far from solid - payments made to a person on welfare, to build a school, to build an aircraft carrier, and to provide job training all count as current consumption.  Obviously, some of these represent long term investments in America (but which ones?). 

Now, we aren't going to change our accounting to reflect that, so fine.  But it does not follow that we should not reflect on how best to present a trillion dollars of privatization transition funding.  Inspiration comes from the treatment of Social Security itself - Social Security surpluses were used for years to mask "operating" deficts, until Social Security was moved off-budget.

Now, some real concerns about privatization - it may involve high transaction costs (also known as "Wall Street fees").  It may be more complicated than some people can handle, although people can be pretty astute when money is on the table.

It may (I am still unsure) affect the mix of debt and equity in a hypothetical global market portfolio in a way that would lead to higher returns to bonds, and lower equity returns.  I am not sure this is true, and I am not sure it is a bad thing - if working class stiffs buy enough stocks to drag down their average return, that may just mean that "the rich" need to find other ways to expand their wealth.

I would think that opponents of Social Security privatization would offer serious objections (which are not in short supply).  If the Times has been reduced to making up scary stories then there is hope that progress might be possible.

MORE: Arnold Kling takes a stab at explaining this.

Max Sawicky provides lots of useful links for the research-minded, and takes a very egalitarian view of deficits with this question.  As noted above, I think government borrowing that is legally required to be re-invested in the capital markets has very different impacts from the annual deficits to which we only recently became unaccustomed.

David Altig, a Fed economist, has a must-see blog packed with the sort of links you might expect, and grapples with Social Security here.

Comments

[martin]

The money to be paid todays retirees has already been spent. The issue is thus how are the funds borrowed to finance the transition costs going to be repaid?

Since taxes are out philosophically (I hope), and cutting benefits is out politically (I know), cutting spending is the only option.

So the Repubs should establish some bona fides and cut spending first-hell, with enough cuts we wouldn't need to borrow a cent.

Here's an idea-let's finish the Reagan revolution. A single example-the Dept. of Education.

After all, Reagan made a campaign pledge to eliminate it, and renewed his promise in his first State of the Union (January 1982): "The budget plan I submit to you on Feb. 8 will realize major savings by dismantling the Department of Education."

Of course, the Democrat House laughed in his face. But, hey, who controls things now? So why doesn't Bush say the same thing in the first State of the Union of his second term?

Do Repubbies not dream big anymore? Here's the 1996 Republican Platform: "The Federal government has no constitutional authority to be involved in school curricula or to control jobs in the market place. This is why we will abolish the Department of Education."

So when they had the will they lacked the power, now that they have the power, they lack the will. Bush is now proposing $57 BILLION in 2005 spending for the DOE-a nice chunk of change for an anti-constituitional agency!

If DOE just wasn't there for just the next 10 years-(i.e. "dismantled") that's $570 BILLION we would not have to borrow (and repay) to cover Social Security transition.

Sheesh. With a sensible farm bill-we wouldn't have to borrow a cent.

Reagan really meant it of course. Obviously, the rest of our Republican friends merely mouthed the words.

That's why I do not trust these lying SOBs to do a damn thing right.

[martin]

P.S. for the ignorami soon to appear and defend Bush along the lines that's it crazy to propose eliminating a whole agency-please be advised the whole DOE was created by President Carter. When first Reagan proposed wiping it out-it wasn't even 5 years old!

Yep! How the Republic survived without it is beyond me.
Maybe that's why the Bush and the Repub Congress increased it's budget by 70% from 2002-2004. 70 PER CENT!!!

So you see why people suspicious of power to begin with might be wondering why the first thing Bush chooses to attack (besides Iraq) is social security, when so much easier targets are there for the taking.

[Patrick R. Sullivan]

Martin is certain to get his wish starting in about a dozen years if the Ostriches have their way:

http://maxspeak.org/mt/archives/000966.html#comments

Even burying heads in the sand isn't enough, they have to delete the cold hard truths from their comments sections lest they have to see them if they ever come up for air.

But, they're gonna find out that choices of the sort Martin mentions will be inevitable if we're to meet the promises we've made to today's workers.

[Mitch H.]

I still don't see why a phased benefits rollback isn't something we could live with. Boomers live longer and healthier than their parents did; make 'em work a couple more years until they get to dip into the federal honey-pot. An extra year before retirement for every three to five year cohort going forward from 1945 until the numbers balance. Maybe throw in a veterans "gap" supplement to cover those who served, and screw the civilian slackers.

Hey, if they want to screw the later generations in turn by keeping the phased rollback going until we can't retire until we're a hundred, all the better - it's another incentive to live healthy, save, or die in the traces. Not as if people my age expect to see a dime of Social Security before we die, anyways.

[Jim Glass]

"I still don't see why a phased benefits rollback isn't something we could live with."

All general benefit cuts have two basic problems that will make then very difficult to adopt when the legislative rubber meets the road at Congressional vote time.

1) They have regressive effect. Low-wealth folk get much more of their retirement income from SS than do high-wealth folk. So benefit cuts like delaying the retirement age disproportionately hurt the poor. All those who believe SS is "social insurance" against poverty will howl mightily about this.

2) SS has already turned to providing negative returns -- less in benefits than taxes paid for them -- for every annual cohort retiring after 2000. Slashing benefits to close the funding gap will make returns *profoundly* negative.

Today's young low-income workers are scheduled to get back from SS about as much as they put in, while middle class folks near the earnings limit will get back only 50% of what they put in. But these benefits are 30% underfunded.

Use benefit cuts to close that gap and the poor get back only about 70% of what they pay in, and the middle class get back only about 35%(!).

And face it, until now SS has been wildly popular because it transferred $10 trillion of *free money* to persons who retired before 2000, the great bulk of which went to the non-poor middle class. That's why SS was so popular with the middle class. And that was the *only* reason. (Not because it remedied poverty -- welfare did that and was never popular).

But now today's young and the future middle class have to bear the full loss of that $10 trillion, to pay for it, as the law stands. That free money wasn't really free after all.

So ... it's one thing to say: "To eliminate SS's funding gap we propose to delay your retirement age, since you live longer than your predicessors." Sounds reasonable enough.

But it's another thing to say: "To eliminate SS's funding gap we propose to cut your SS benefits to 35% of what you pay into it, so you take a 65% loss after we gave all your ancestors big gains -- and *because* we gave your ancestors such big gains".

Alas, saying the first is saying the latter. And how many are going to support a social insurance reform that proposes to impoverish them thusly?

Put #1 and #2 together, and any general benefit cutback is going to be a whole lot tougher to enact than a lot of people imagine.

[jack risko]

As an investment banker and student of these matters for over 30 years, the issue seems pretty simple to me: saving is better than spending when it comes to retirement issues, whether personal or national. The real debate is how to handle transisiotn costs:

http://www.dinocrat.com/archives/2004/12/04/social-security-reform-made-real-easy/

Thank you, Jack Risko

[John Thacker]

The New York Times is being particularly mendacious when it compares Social Security reform, which puts the already existing debt on the books, to Enron's practices. It's the current, non-reformed, situation, which has a massive amount of debt wrongly counted, off the books, and ignored until later, in a way that Wall Street would never accept.

But it's the government doing it, so all sins are forgiven by the Times, as always.

[deona]

The Real Truth about Social Security

The impending "crisis" in the Social Security system is surprisingly simple to explain and to understand, as are the solutions, once the distortion, mythologies, and outright lies about the system are punctured.

1. The True FICA Tax Rate

The best place to start is with the actual Social Security tax rate on the individual.

In American commerce, by far the biggest expense for most on-going businesses is direct labor costs. No employer can afford not to intelligently, and with discipline, manage the cost of labor. All positions must be filled with employees who contribute, on average, sufficiently to the enterprise's bottom line a value in excess of the cost to the employer of its labor. All other things being equal, the mismanagement of labor costs will doom a business in the competitive marketplace. Across all industry, the percent of revenues managed to the bottom line of the average business is less than 5%, after taxes. Mismanagement of labor costs by fractions of a percent can affect the net bottom line by double-digit percentages.

Under current tax laws, if the direct labor cost budget for a particular salaried position is $50,000, the salary offered can not exceed $46,446.82. Why? Because of the cockamamie, politically-influenced tax code designed to make it appear as if the employer "pays" the "employer share" of the employee's Social Security tax, which is 7.65% of his reported "salary". Once this amount ($3553.18) is added to the reported "salary" of $46,446.82, the employer will thus meet its budgetary limit of $50,000 for the position. Thus for an employee for which a company is willing to pay $50,000 per year; the employee will receive $42,893.64 before income tax withholding, and $7106.36 in FICA taxes (14.21% of the $50,000) will be sent to the U.S. Treasury. Do the math.

Does the employer pay 1/2 of the employee's FICA tax? Yes, as a matter of fact the employer pays ALL of the employee's FICA tax. Every dime of the employee's take-home pay, his federal income tax withholding, and his FICA tax is paid directly by the employer. It makes not a whit of difference to the employer's bottom line how that $50,000 is distributed. It is all booked as labor expense. The percentage of the $50,000 that winds up in the employee's pocket, versus the percentage that is submitted to the U.S. Treasury as payroll taxes and federal income tax withholding, is a matter between only the employee and his federal government.

For all employees who pay FICA taxes all year the true FICA tax rate suffered by the employee is 14.21%.

2. There is no Social Security Trust Fund.

Every year a simple arithmetic notation is made somewhere in the federal government. It is the difference between two numbers:

a) The sum of all Social Security payroll taxes withheld from all employees and submitted to the U.S. Treasury.
b) The sum of all Social Security benefits paid.

Throughout the history of Social Security, the first number has been larger than the second. Throughout the history of Social Security, the population has been led to believe that the first number has been securely stuffed into a cookie jar somewhere, to be repaid, with interest, to the employee when he retires. Only the first statement is true. In actuality, to date, the first number has been the source of funds for the second number. The difference between the two sums has been summarily spent on other forms of federal spending, and it has been spent the month it was collected.

So why even keep track of the difference? Why, so the federal government can report to the American public that it has carefully accounted for the FICA taxes collected that were spent on other government programs by recording these expenditures as an interest-bearing loan to the Treasury from the Social Security Administration and calling it the Social Security Trust Fund!

If one draws a circle around the entire federal government behemoth, the Social Security System is INSIDE THAT CIRCLE! Politicians have told us for decades that all excesses in FICA taxes collected above benefits paid have been "invested" in U.S. Treasury notes in the Social Security Trust Fund's behalf. How stupid do they think we are? Hauling wheelbarrows full of U.S. Treasury Notes from the U.S. Treasury to another element of the federal government, the Social Security Administration in Baltimore, is an "investment"? For years, on the Cato Institute's web site dedicated to the Social Security fiasco (www.socialsecurity.org), there have been articles trying to explain this nonsense. The best one I have read offered, in so many words, this explanation:

If the Social Security Trust Fund were worth a bazillion dollars, when the SSA needed to cash in part of its trust fund to raise, say, $50 billion to pay beneficiaries, what would then ensue? We must suppose the SSA would cart $50 billion worth of its carefully saved U.S. Treasury notes back over to the U.S. Treasury and demand the cash. What would the U.S. Treasury then do? It has run at a deficit for decades. It borrows money every month, renewing previous loans to the public, and making new ones. It does not have $50 billion in loose cash lying around; it cannot raise taxes; it cannot talk the SSA into lowering benefits, (thus obviating the need for the $50 billion), so what does it do? It has no choice but to sell the SSA's $50 billion worth of Treasury Notes to the public to raise the cash. In other words, it has to borrow the money. It has to increase the national debt by $50 billion.

Now assume there is no Social Security Trust Fund, but the SSA is facing a $50 billion shortfall in beneficiary payments. How will the government raise that cash, if it cannot raise taxes or lower benefits? It will borrow $50 billion, by selling U.S. Treasury Notes to the public. It will raise the national debt by $50 billion.

A $bazillion trust fund is exactly equal to no trust fund.

There IS not a Social Security Trust Fund. It is a figment.

One comical addition to the Trust Fund myth: Not only does the federal government loan itself the difference between FICA taxes collected and benefits paid, it also pays itself a handsome interest rate on the loan it has made to itself. And guess how it pays that interest? Why, it simply ups its loan to itself by the amount of the interest due to itself. Cute.

3.The "Obligations" of the Social Security System.

Much is said about the poor taxpayers who have been paying FICA taxes all their working lives, and the horror of the prospect that the SSA will somehow renege on its "obligation" to pay those taxpayers the benefits they' re due when they retire.

If, as an individual, I purchase a U.S. Treasury Bond, then I have in my hands a legally negotiable instrument of debt obligation by the federal government to me. When I choose to redeem it, the federal government is legally bound to pay me.

If I am a government contractor, in possession of a signed government contract for goods or services, which defines the conditions under which I and the federal government have formed a business relationship, then, when I meet the conditions of the contract, it is a legally negotiable instrument obligating the federal government to pay me my due.

I challenge any citizen who has paid Social Security taxes to search his desk for some negotiable contract with the federal government obligating it to pay him Social Security benefits when he retires. There is no such thing. Current benefits are dictated by current law, which can be changed tomorrow by a majority of both houses of congress and a presidential signature. Actual language to this effect is stated in the annual taxpayer statements from the Social Security Administration.

The Social Security Administration has absolutely NO legally negotiable obligations to the citizens of the United States. There is a total disconnect, legally, contractually, or otherwise, between FICA taxes paid and benefits received.

4. Bankruptcy and the Social Security System

For those who may be worried about the Social Security System going bankrupt, there’s good news and bad news. The good news is that there is absolutely no way the Social Security System can ever go bankrupt. The bad news is WHY there is absolutely no way the Social Security System can ever go bankrupt.

Webster defines "bankrupt" as "a person or enterprise that has become “insolvent". Webster defines "insolvent" as "having liabilities in excess of a reasonable market value of assets held". Thus those terms have absolutely no relevance to any enterprise which has neither assets NOR liabilities. The concept of “return” is ludicrous in any technical economic sense in relation to benefits received versus taxes paid. “Returns” imply investment. There’s none of that here. Journalists who intersperse such words in articles about the Social Security System are editorially irresponsible.

5. What IS the "Social Security System"?

The Social Security System is now, forever has been, and forever will be a system where money is taken from people who work and given to people who do not work. It is fraught with mistruths, as well as built-in psychological aspects that have so cleverly perpetuated its misconceptions.

If you want to hear desperation in a person's voice, confront him with the notion that his employer is not really picking up half his FICA tax burden; rather he is suffering the entire expense out of the sum his employer is willing to pay for his labor.

There is no retired millionaire anywhere, upon receiving his $2800 Social Security benefit check and as he is spending it on green fees each month, who is psychologically prepared to accept that it requires a combined 14.21% taxation on ten $2000/month fry cooks at Denny's to fund his benefit check. He clings to the myth that his benefit check is simply a return on the investment of all those Social Security taxes he paid while he was working.

Try explaining to a fry cook at Denny's what his true FICA tax rate is, and where his FICA taxes are really going.

As Aunt Josie struggles each month, after cashing her $750 Social Security benefit check to pay for her housing, her heat, her medicine, and, with whatever may be left, her food, it would be cruel to point out that her successful nephew Jamie, the $435,000 per year tax lawyer, is only helping support Social Security with a measly 3% FICA tax rate

6. What's to be done about Social Security?

Simple question, simple answer. There are only three things to choose from.

Many uninformed citizens mistakenly believe that all our government needs to do to pay for government programs is to print more money. Actually, the government is pretty limited not to spend money it cannot raise from the private sector, through fees and taxes or through borrowing. Any administration that even THINKS about solving the “Social Security problem” by printing new money should be impeached and convicted (all of ‘em). It would cause inflation of unbelievable proportions. So the only solutions to the so-called Social Security crisis are these:

1. Raise Taxes
2. Raise the Federal Debt
3. Reduce Benefits

Some combination of these three things will happen. There absolutely is no avoiding it. This is not an opinion; it is an inescapable fact.

As it is very unfortunate for a person with a brain tumor to be told he has a headache, and to treat it with aspirin, so, to, would the Social Security situation benefit from an honest appraisal of what it is and what it is not. It is not a retirement program, by anyone’s definition of a retirement program. It is re-distribution of money from working people to retired people. It is the wolf of welfare hidden in the sheep of “retirement program” clothing.

So long as the notion persists that this is a retirement program, the cancer will continue to grow unchecked. One example is the currently proposed folly of "privatizing" Social Security. As conservative as I am, and as much of a believer in personal investments as I am, it gives me nightmares to contemplate new ways of talking of "investment" in relation to Social Security.

Taxes must be raised, or the federal debt must be raised, or the benefits must be reduced to solve the problem. THERE ARE NO OTHER CHOICES!!! This is a huge news story. Clinging to the concept of a “retirement program”, we are now talking about going in the opposite direction - by lowering taxes. By lowering taxes, I mean reducing what we pay to the U.S. Treasury in FICA taxes, so we can (bureaucratically, I'm sure) "invest" in private retirement accounts. Cannot everyone see the perils of that, when coupled to a program like Social Security? Not only are we going to exacerbate the problem by suffering the loss of tax revenue while the crisis is still growing (thus accelerating the day of reckoning), the whole scheme is nothing but a political gamble that the process of having our own private investments will somehow, politically, soften the blow from the inevitable reduction in benefits that must surely come in the future. When market conditions deteriorate in the future, and the government must begin to subsidize those self-financed benefits that are no longer sufficient, it will be as if nothing had changed, only worse.

No politician of either party will touch these realities. This situation needs an explosion of understanding among the population about the true nature of Social Security to happen first, and then the citizenry needs to demand of our politicians an admission of the realities of the current system. Perhaps the blososphere has come along at just the right time! Sane, sensible remedies will arise through simple logic, to wit:

1. Expose the current system for what it is. Face up to the fact that its cost is all on the backs of employees, not shared by employers, and be honest about the tax rate.
2. Means test benefits by the same kind of rules we means test welfare.
3. Since FICA taxes are in reality totally disconnected from benefits, give everyone in the country (including the president and the rest of the federal and state governments) the opportunity to pay the same 14.21% of their income as FICA taxes as is now paid by fry cooks at Denny’s .
4. Once the system has been corrected so that it properly and correctly reveals itself as nothing but an old-age welfare system, merge it into the Department of Health and Human Services, where it belongs.
5. Encourage private investing for retirement (as a start, by eliminating the capital gains tax), but otherwise, for God’s sake, leave the federal government out of it.

[Debt]

Debt: "How To Get Out Of Debt By: John Mussi "

Debt: "Eliminating Credit Card Debt By: Alan Barnes "

Debt: "We all know about debt. If you don't have too much as an individual you can increase the quality of your life,"

[wilfred lerma]

The only reason the Republicans visit this subject every now and then is nothing more than their hunger to get at the fund! We went through this same scare tactic in the mid 1960s. I recall feeling the same way as jack risko (posting Dec 04 at 10:31 AM) above. I recall the rotten feeling that I was contributing to a lost cause and that when my time to retire would come in the year 2001 I would not collect one red cent from Social Security. I am very fortunate that the SMOKE was only smoke and the fund is still there for me and my family. I retired four years ago with help from a small retirement fund. At todays inflated prices (they seem to go up daily) due to gas being $3.199 a gallon for regular unleaded, we still must budget carefully. I guess I would be homeless and eating at soup kitchens or out of garbage cans if social security had gone broke as they had predicted. Don't let them privitize it, please bother to inform yourself as to how solid it is. Also get involved and inform others to look at history. It is real easy to minipulate figures and hide true facts. Just remember Enron and their accounting.