Social Security Plans: Taking Stock
I very much agree with “Shivers Over Social Security,” John Balzar’s Dec. 19 commentary opposing Social Security privatization. The dramatic losses in the stock market since Sept. 11 have devastated the retirement funds of many middle-class Americans who are nearing retirement. This is true not only for direct investors but for the vast majority who trusted in the diversification of pension plans such as the 401(k), which are not federally insured.
Surely, then, this is the time to dump any and all plans to privatize Social Security. Most Americans cannot risk the loss of retirement funds and should not be at the mercy of the market. Social Security, as it stands, is the ultimate diversification, a vast pool of all workers’ moneys guaranteed by the taxing power of the federal government. Social Security should remain intact and guaranteed for every American.
Jim E. Davis
Laguna Woods
*
In his Dec. 20 letter Theodore A. Andersen of UCLA, a proponent of Social Security reform via stock investments, notes that “from 1991 to the present, for example, the market showed an average annual return of over 13%.” As different options to save Social Security have been discussed over the months, we have seen an endless stream of charts showing us how much money retirees would have if they invested their money in the stock market instead of Social Security. What we have not seen is an examination of the effect of a downturn on the money that a person would have available to live on. If the value of a retirement portfolio goes through the floor, what does that do to the investor’s income level?
Clifford Payne
Pittsburgh, Pa.
*
I am concerned with a couple of issues related to the partial privatization of Social Security that I have never seen addressed and that I believe should be resolved before privatization occurs. First, every politically correct pressure group is going to want to be able to have an input as to what securities can and cannot be purchased in order to support their agendas. This should not be allowed.
Second, privatization will make a significant amount of money available for investment. A study should be done as to how this additional money will affect market performance and stability.
Third, presidents of both parties have found it convenient to raid the Social Security trust fund in times of government need. It should be made very clear that under no circumstances will the government be able to borrow from these private accounts without the consent of the owners of the accounts.
David Hilts
La Palma
*
President Bush to aging baby boomers: “They want Social Security? Let them eat stocks!”
Eric Holman
Los Angeles
