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December 20, 2004

Comment Warning

I don't know how to explain myself properly, but I'll try. If you write a comment that is completely off subject and I deem the only point of your post is to point readers to your commercial website, I will delete your post. I'm all for free speech, but I didn't create this site as a free ad space.

Ultimately, this is my soap box. You should get your own.

On the other hand, your comments will not be purged simply because our opinions differ. Only if I consider you a troll.

Posted by cj at December 20, 2004 4:43 PM


Long on criticism of President Bush! The President has no obligation to present any plan to the press. The congress will enact, modify and bill related to Social Security. I will review as briefly as possible the situation that the system faces. Let me start with some wisdom from every liberal?s hero.
?The time to fix the roof is when it?s not raining,? President John F. Kennedy would say. When it comes to our nation?s Social Security system, threatening storm clouds have gathered on the horizon. Reform provides the only opportunity to avoid future shortfalls in revenues and eventual collapse of the system. It?s increasingly obvious that preserving the status quo is not a sustainable position or a viable option.
The major problem with the current system is structural. Designed as a ?pay-as-you-go? system more than 65 years ago (meaning today?s workers contribute to support today?s retirees), demographic changes have made this an increasingly obsolete model. For example, at the time of the adoption of the Social Security Act, the payroll taxes of roughly 42 workers supported the benefits of one single retiree. Today, there are only three workers contributing per retiree. By 2030, the ratio will shrink to two workers to one retiree. This reality suggests a demographic time bomb set to explode on future generations of workers.
Social Security at its creation was never envisioned as more than a retirement supplement. The challenges to the program create an imperative for action. Restoring the program to a sound footing requires more than strong economic growth of the overall economy; its future rests in innovation and reform.
Clearly, with the explosion of new forms of investment (i.e. mutual funds, which enable small savers to ?pool" their investments over a range of equities and bonds) any Social Security reform needs to include Personal Savings Accounts (PSAs). The Investment Company Institute reports that there are more than 90 million individuals, representing 52 percent of all U.S. households, who own mutual funds today. The groundwork for working Americans to build their own retirements in the markets has already been laid.
PSAs would offer workers the opportunity to voluntarily divert a portion of payroll taxes into individual investment accounts. That would generate a greater return on investment. Today, the return on investment for retirees amounts to less than 2 percent; conservatively managed PSAs could garner 5 percent or better. And unlike today?s system, those PSAs could be passed along to heirs.
The President?s Commission to Strengthen Social Security embraced PSAs in its final report, issued in December 2001, as a means for modernizing and restoring fiscal soundness to the system. The president has placed this component at the top of his agenda for reforming Social Security.
Personal Savings Accounts alone will not fix Social Security?s fiscal troubles, but it will help reduce the long-term cost of the program and create a new generation of investors. In the near term, this could mean as much as $175 billion in new capital flowing into the markets. Even more important, it will go a long way to helping establish America?s new ?ownership society.?

"The Christmas spirit of peace, hope, and love is the spirit Americans carry with them all year round, everywhere we go. ... The tree that lights up our country must be seen all the way to heaven...its lights fill the air with a spirit of hope, and joy from the heart of America." --Ronald Reagan

Posted by: David at December 22, 2004 1:49 PM

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