Social Security options |

Social Security options

I am one who is critical of privatizing Social Security. It does nothing to solve the monetary problem of the system, and it creates its own by saddling future generations with huge deficits to cover the transition costs. The administration and transaction costs would be greater than the current system. The projected returns are overly optimistic (initially they were at 7 to 8 percent; now they’re down to 4 percent.) Additionally, participants would be required to purchase an annuity as a means of withdrawal, thus further reducing their “nest egg.”

There are many steps we can take to fix Social Security. None require a “panic mode” mentality. Yes, Mr. Greenspan, we should go slow. We have plenty of time to figure it out.

Some ideas: Eliminate the earnings cap; redirect income taxes paid on Social Security benefits (yes, they are taxable) from general revenue back to the fund; invest part of the surplus in zero coupon bonds or Fannie Mae mortgage-backed securities; do not raise the retirement age, as this would unfairly penalize African-American male workers who typically enjoy fewer post- retirement years than their white counterparts. For more, read “Social Security: The Phony Crisis” by Baker and Weisbrot.

Tim Stokes

Grass Valley

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