Sorting out the issue

[RRand98163@aol.com]

Dear Amy Eunice,

This is an attempt to answer your question about the financial problems of 
Social Security.

The principal device for assessing the financial soundness of the system is 
the set of 75 year projections prepared annually, as required by the law, by 
the SSA staff. The latest projections show a shortfall of 2.1% of covered 
wages as between benefits and expenses on the one hand and taxes and interest 
income on the other, 14.5% as compared to 12.4%. This is about 15% of taxes. 
This shortfall should be corrected soon by some legislative action, if not 
this year certainly within the next two or three.

The confusion arises from the fact that many critics of the present system 
are using the financial problem, substantial but not in any sense a crisis, 
as an opportunity to enact drastic changes in the design of the system.  
Those proposals, which consist of changes to some system of personal 
accounts, should be considered on their own merits as to whether or not they 
constitute a better approach as well as on the question of how they propose 
to deal with the financial problem. One aspect that I think is not being 
properly dealt with by the critics is the question of transition costs to a 
new personal account system, which has been estimated at six trillion dollars.