THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Wednesday, January 15, 1997 TAG: 9701150003
SECTION: FRONT PAGE: A14 EDITION: FINAL
TYPE: Letter
LENGTH: 37 lines
I am bemused by recent stories in the news of the impending bankruptcy of Social Security and the various proposals for ``saving'' the racket.
So far, the only proposal that makes any sense is the one to invest 40 percent of the payroll-tax dollars in the stock market. But I have to wonder if we are being told the whole story.
The story presently goes that the money we pay into the Social Security system is being ``invested'' in government bonds. That is to say, money the government is supposed to be saving for us as a retirement supplement is being lent to the government at a significantly lower interest rate than we could get from a mutual fund.
But I wonder if the investments in government bonds are even made in the first place. It seems more likely to me that the money we pay in now is being paid right back out next week to those who have already retired. If that is true, I have to wonder why the system should be saved in the first place, since it would then be a scheme which, if administered by any agency other than the government, would be considered a scam, a con, a racket along the lines of a Ponzi scheme.
If it is not true, then it seems there should be no danger of impending bankruptcy for the system, since all the money that has been paid into it by those not yet retired is sitting safely in government bonds somewhere, gathering at least 2 percent or 3 percent interest. (And by the way, who pays that interest on government bonds?)
Of far more concern to me are the plans to institute mandatory investment or savings accounts. One of those plans also includes a hike in the Social Security payroll tax. Where does all this government taking of privately earned dollars stop?
CURT PRASKY
Portsmouth, Jan. 6, 1997