By Richard Peterson
President Bush is aggressively pushing his assault on Social Security.
"The math doesn’t work," he told an audience in Fargo. The system will pay out more money than it brought in beginning in 2018, he says, "And in 2042 it’s bust," the president said.
He told a Little Rock, Ark. audience, "I fully recognize that the personal retirement account is not the only thing needed to solve Social Security permanently," Bush said, "But it’s a part of the solution."
I’d sure like to know how.
It is true that the Social Security program will begin to run low on money in 2018. So how will taking money out of the system for private accounts help the system? The answer is that it won’t. It will aggravate the problem and cause huge borrowing by the federal government. It’s like putting an IRA on a credit card. It’s a bad idea for that reason alone.
President Bush doesn’t tell people who will begin to collect Social Security 20 years from now that their Social Security checks will be lower with personal or private accounts. He thinks people should gamble on investing in private accounts in hopes they will make up the shortfall in Social Security checks. In other words, trade a sure benefit for a gamble.
Markets go up and markets go down. It isn’t wise to trade the certain stability of the Social Security system for the uncertainties of the market.
It is true that Americans don’t save enough. They should be saving more, but there’s no reason the Social Security program should be part of a plan to force people to save. There are all kinds of places people can make investments entirely aside from Social Security. There is no reason to weaken the Social Security program by trying to convert it to an investment plan.
The predictions made about Social Security’s pending bankruptcy may be overblown. Any predictions made by George W. Bush should be suspect because the landscape is littered with his inaccurate pronouncements and the fruits of his incredibly poor judgment.
Nevertheless it does appear that at some point in time either the premiums paid for Social Security will have to increase or benefits will have to be cut.
That is where we should begin. Under present law, Joe Schmuck earns $40,000 and pays .062 percent, or $2,480 in premiums on his Social Security. His employer matches that. His brother, Al Schmuck makes $90,000 and pays .062 percent, or $5,580 in premiums for his Social Security. Their sister, Leona Moneybags makes a cool $1,000,000 per year and pays less than six-tenths of a percent (.006), or $5,580 for her Social Security premium. Instead of giving a major break to the wealthy, they should probably be paying the same percentage as the rest of us.
There’s a precedent for this. The .0145 Medicare tax is levied on all income. There is no ceiling.
Making this change would put the program into solvency for the foreseeable future. George W. Bush, of course, has ruled out any increase in premiums, which he would call a tax increase. Our compassionate conservative president prefers borrowing so our children and grandchildren can make the payments instead of us.
Another change that could be made is to set back the retirement age. As far as I’m concerned, 62 is too young to retire. That age could be increased to
65 and I think people would go for it if it would mean the program will continue indefinitely.
We probably should wait until George W. Bush is retired from the presidency before we start pumping money into the system because he’ll just borrow and spend it.
With the sudden revelation of 57- and 59-year-old women giving birth to twins, and no doubt others who are equally that age, or maybe even older, giving birth to single children, the following story seems to have surfaced at an interesting time:
With all the new technology regarding fertility, a 65-year-old woman was able to give birth to a baby recently.
When she was discharged from the hospital and went home, her relatives came to visit. "May we see the new baby?" one asked.
"Not yet," said the mother. "I’ll make coffee and we can visit for awhile first."
Thirty minutes had passed, and another relative asked, "May we see the new baby now?"
"No, not yet," said the mother.
After another few minutes had elapsed, they asked again, "May we see the baby now?"
"No, not yet," replied the mother.
Growing very impatient, they asked, "Well, when CAN we see the baby?"
"When he cries!" she told them.
"When he cries?" they demanded. "Why do we have to wait until he CRIES?"
"Because . . . I forgot where I put him."