Saturday, January 22, 2005

Kerry Blogger Promotes Social Security Reform in BusinessWeek Magazine

Not that I want to toot my own horn so to speak, but I was pleased to get a letter to the editor related to Social Security reform published in the Jan 24, 2005 edition of BusinessWeek Magazine.

I'm against the President's risky and costly privatization plan for Social Security, however I believe the program does need long term adjustments at some point. In my letter, as I've stated on the IFK site frequently, I advocate for gradual increases in the taxable payroll amount mixed with an increase in the retirement age to be phased in over time. These tweaks, to make SS remain solvent for future generations, could be accompanied with more incentives to encourage individual investment in 401(k)s and IRA's to offset any possible reduction in future benefits.

On the other hand the President's current SS privatization plan of choice does little to actually offset his proposed cuts in benefits (indexing payment to inflation rather than wage increases), while creates a windfall for the investment and financial community. In essence his plan would cut benefits drastically for today's younger workers like myself, while gutting the "Security" aspect of Social Security Insurance, relying on the market to overcome large benefit reductions.

I hope the Dems are listening and ready to fight a Republican Party hell bent on dismantling one of the best run and most beloved government programs of all time.

IFK Editor

READ: Revamp Social Security? Just Tweak 401(k)s And IRAs


Anonymous Anonymous said...

A Cure Worse Than The Cold
An Editorial in US News and World Report

In pursuit of his (President Bush) "ownership society," he wants to move Social Security toward "greater individual opportunity, risk, and reward" by allowing individuals to carve themselves private investment accounts out of Social Security payroll taxes, much like a 401(k) plan. This raises a whole host of problems. It discriminates against poorer workers, for one thing. Why? Because the lower your income, the less you have to invest, and the smaller your return will be. The Bush plan offers nothing close to the financial security of the existing program. Then there's this: Are individual investors sophisticated enough to match the higher returns now being forecast? At least 10 studies analyzed by the Securities and Exchange Commission indicate a disturbing level of financial illiteracy. Only 12 percent of the investors studied could distinguish between a load and a no-load mutual fund; only 14 percent understood the difference between a growth stock and an income stock; only 38 percent knew that when interest rates rise, bond prices fall; almost half somehow believed that diversification guarantees that their portfolio would not suffer if the market dropped; and 40 percent thought that the trust fund's operating costs would not be deducted from their investment return.

7:11 PM  

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