“ Promises to Keep ” ( JofA , Jul.05, page 41) did an excellent job of comparing the seven social security reform bills to current law. I’m glad it reminded CPAs “it’s time to get involved” to “help the public understand the plans before us and perhaps help shape even better ones.” With those comments in mind, I submit the following thoughts on the topic based on my research:
There is a plethora of proposals by politicians and academicians regarding ways to fix Social Security, including the seven plans discussed in the article. The majority of these proposals, however, are not citizen-friendly ways to solve the problem.
Although politicians would never admit it, the real reason for the Social Security problem is that the U.S. government robs Social Security to pay for wasteful pork-barrel and sinkhole social programs.
My research reveals the Social Security Trust Fund currently holds $1.6 trillion of nonnegotiable U.S. government bonds. If these payroll taxes had been invested in commercial mutual bond and/or stock funds, the $2.3 trillion needed in the future to fully fund Social Security benefits would be available.
The personal accounts proposal is a smoke-and-mirrors sham and will not solve the Social Security problem. Since many Americans have limited knowledge of how to invest their contributions in personal accounts, this proposal could increase the poverty rate for elderly Americans in future years.
The long-term survival of Social Security will require legislation allowing the Social Security Trust Fund to invest the $1.6 trillion and future payroll taxes in commercial mutual funds. The income cap on payroll taxes should be increased to 90% of all income earned, including the ludicrous incomes earned by overpaid executives.
Hope springs eternal!
Grover L. Porter, CPA, PhD