Privatization is not the answer to the Social Security question
When he makes speeches to plug the unsound changes he wants for Social Security, President George W. Bush often says today's world is very different from the one in which the program was created. He's right on the money. In the 1930s, when Congress and President Franklin D. Roosevelt crafted the various components of Social Security, a quarter of Americans were out of work. The Great Depression handed down an unprecedented expansion in the size and power of the federal government, much of which was brought on by new programs intended to look after people who until then had fended for themselves. Roosevelt left factory workers, farmers and the elderly in much better hands than he'd found them.
The Depression ended, World War II was won and Roosevelt died. Americans geared up and, in relatively short order, became the wealthiest people on Earth. They began to elect more conservative politicians who didn't believe in big government. These leaders saw average Americans living better than humans ever had and were convinced that capitalism, not government, should be the nation's governing standard. So President Reagan cut taxes and regulation on many industries; thousands of local politicians called for the market to determine policy or zoning decisions; and President Bush, an ardent believer in the mystical wisdom of the market
decided he wants it to govern Social Security.
In addition to a payroll tax, Bush wants Americans to have the option to set aside about 4 percent of their pay, up to an initial maximum of $1,000, into private accounts. The Social Security Administration would then invest the money in one of a few government-selected funds. As the stocks and bonds in the fund gained or lost value, so too would the retirement savings invested therein. This way, Bush says, every worker would have a stake in their pension and the success of the economy, a situation he calls an ownership society. But no one's retirement money under the private account system is guaranteed. If an economic downturn makes peoples' accounts lose value, they could retire with much less than they started out with. This very risk -a natural, accepted part of the game for private investors -is what makes private accounts a fundamentally bad idea. Social Security must be a safety net, not a roulette wheel.
There are other practical reasons to oppose Bush's idea. It would necessitate enormous new public debt, for one: Already running a deficit of some $427 billion, the government would have to borrow about $754 billion more to make all of Bush's changes to Social Security. All this federal borrowing has weakened the once-mighty U.S. dollar against other currencies, as any Ohio University student who's recently traveled abroad can attest. And switching to private pension accounts wasn't a consistent slam-dunk for retirees in Europe or South America. The Los Angeles Times wrote about a 64-year-old Chilean woman who had to take a part-time job because her privately-invested retirement fund paid her much less than the government had promised. Public retirement programs exist so workers can retire and draw the fixed benefits they've been paying for their whole lives.
If private accounts aren't the answer to keeping Social Security around for today's OU students, what is? Tomorrow we'll talk about the possibilities -and make a few suggestions of our own.
A welcome respite
When spring comes a little early
This town is unpredictable in the way it receives visitors. Gov. Bob Taft once visited a business here and from the behavior of people crossing Court and Union streets, you'd never have guessed. State Auditor Betty Montgomery was in town last week and the Uptown saloons lost no business. But when spring comes calling -as it did yesterday, gloriously -Athens puts on its best show.
Skirts and flip-flops returned; Frisbees were tossed; and the number of burritos eaten on College Green skyrocketed from lunchtime on. The sun shone golden all day, and when it set, the clouds over West Union Street were the shade of pink usually reserved for early June. Breezes yesterday were mild and pleasant, as if Old Man Winter had been punched in the gut and lost the edge to his glacial breath. Porches and balconies, where since November most students have consigned their unused grills or bicycles, were in full use again. The AP reported that major league baseball pitchers and catchers report on Thursday. Yesterday was the first encouraging sign in weeks that this winter could ever end. 17
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