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Politics : Health care / Social Security / Medicare & politics -- Ignore unavailable to you. Want to Upgrade?

To: mrknowitall who wrote (19)	12/11/1998 10:33:00 PM
From: Peter O'Brien	Read Replies (1) \| Respond to of 25

A few (serious) thoughts this time... While individual accounts would be nice, I don't think this is the fundamental problem with the SS "trust fund". The problem is that there is no independent management of the assets. Imagine! T-Bonds are desired worldwide for their liquidity (witness their performance during Sept/Oct of this year), and only SS is stuck with a non-marketable version! In other words, even if it were more of a traditional "defined-benefit" plan, with no individual accounts, but with independent management of the assets, it would still be a much better situation. Federal regulators would certainly crack down on any private company that tried a similar scam with its own employees' pension, yet SS gets away with it. By the way, the "double-dip" is paid (indirectly) by regular employees too. It isn't as visible since the employer pays the other half, but salaries would probably be higher if it wasn't required. Actually, if Congress dared to remove the income limit on SS taxation, it might have a political side-benefit. At least the fiction that SS is a valid pension plan where benefits are based on contributions would be completely shattered. As 401K and IRA assets continue to grow, I'm hopeful that it will become increasingly dangerous for Congress to try and attack them to solve the SS problem. In fact, I think these tax-breaks are becoming a major "safety valve" in our political system to keep the successful people in our society relatively happy and politically inactive. Evidence of this can be seen in the recent 1997 tax law changes which actually removed the 15% "excess distribution" penalty from an IRA.