PART 2

Our politicians, even those who are true believers in a government controlled income transfer system like we currently have, know that it simply cannot work in the future. They are either being dishonest with their constituents, or do not understand the problem because of ignorance of the facts, and/or think that the only solution is a simple one... raise your taxes.

"If we followed John Kerry’s lead, e.g., no benefit cut and no personal retirement
accounts, we would have to raise payroll taxes as much as 60%!"

It is time for us to get our collective heads out of the sand and and get this problem fixed soon. President Bush wants to fix this problem now. He believes that a big part of the answer to the problem is to turn our current income transfer system into a wealth creation system before our current Soc. Sec. system runs out of money.

Many of our elected servants are trying to scare current retirees, with half-truths, and misrepresentations about the dangers of privatizing Soc. Security. Please remember, also, that these same elected servants have their own government paid retirement plan, separate and unencumbered from "our" Soc. Sec. plan. Therefore, any dragging of their feet in solving this problem .... well lets just say that they may not be as "critically motivated" as you and I.

This new and improved ownership Soc. Sec. retirement plan that is being proposed is designed to work within an improved and modernized Soc. Sec. system. Ever since 1983, workers have been paying more taxes into the system than is/was needed to cover our current retiree benefits. That extra money was supposed to be saved in the S.S. Trust Fund to pay for the baby boomers benefits when they retired; because, it was known, there would not be enough younger workers paying into the system to cover the obligations promised to the baby boomer generation upon their retirement.

But, guess what? Over the last 20 years, our politicians have spent this money that was to be set aside and issued IOU's. One option being considered would allow the younger workers to put 2% of their taxes now being "pilfered" from the Trust Fund and invest it in stocks, bonds, or into bank certificates. This would produce returns far greater than the "artificial" returns that they supposedly would get from the current S.S. plan. Furthermore, current retirees (and those soon to retire as well) would be guaranteed to get every cent of the benefits they have been promised.

We have been hearing already, and will continue to hear over the coming months, that the "transition costs" would be too high and that we cannot afford the costs of implementing the new retirement system. However, the Chief Actuary at Social Security has studied the proposed provision and concluded that this was not the case. In his judgement, the bill's provisions were adequate to handle these "transition" costs.

Any plan to improve and modernize the system to guarantee its future viability for our children and grandchildren also needs to guarantee that today's seniors benefits are also guaranteed with no reduction in benefits.