Privatization would threaten retirement
I have a little problem with Bill Hartman's "The great debate over Social Security" in the July 5 Fence Post.
I remember when Al Gore mentioned those funds should be put into a "lock box" so that nobody could "borrow" from them.
Well, here we are, eight years later, the Bush administration is apparently borrowing $2 trillion from the Social Security Trust Fund (with no plan to repay it).
To give you an idea of how much that is, for every $6,200 of FICA you pay into the system, more than $1,900 of that will be borrowed by the administration without any plans for repayment. Wow!
I paid into the system from ages 12 to 65. For approximately 40 of those 53 years, I paid the maximum.
As a very careful investor, all of my investments were investment grade corporate bonds and stocks of companies highly regarded among money managers.
Yet, over the recent past, some of those investments became almost worthless through fraudulent reporting, theft by officers, etc. Others simply went bankrupt.
None of these investments were speculative and had we had privatized Social Security, those investments would have no doubt been on the government's "approved list."
For this scenario, let's assume that privatization has been adopted:
Millions of people are five to 10 years away from retirement and they have invested a substantial amount of money into some good, solid, investment grade securities.
Then, boom! Another dot com fiasco or another Enron, WorldCom or Tyco disaster.
A disturbing number of investments disappear or become nearly worthless.
Retirement day comes and these folks have a lot less money than they planned on.
They demand Congress and the president make up their losses because they said it would work and it didn't.
Where will that bailout money come from?
Sorry, but I think privatization is a very bad idea, at least until Congress gets serious about patching all the holes in the system first.
Maybe the first thing they should do is stop borrowing money they can't repay. That Al Gore idea looks pretty good now, doesn't it?
Len Brauer
Palatine