Response to Reese Stanton

[National Dialogue Moderator <moderator>]

I would like to briefly respond to Reese Stanton's questions.

QUESTION #1:    If the financial markets dipped to the 
extent that those against private accounts insist it 
will (another 1929), would it be fair to say that such
an economic downturn would have a deteriorating effect on 
the currently underfunded pay-as-you-go system? 

Yes, in so far as the stock market does have an effect on economic growth
and wages.  Economic downturns would affect both the market and all aspects
of federal spending including Social Security.

QUESTION #2:    In our wage-based, demographically driven 
pay-as-you-go system, if unemployment roles suddenly increase 
dramatically, would there be sufficient payroll tax revenues
coming into Social Security to fund benefits?

Yes, especially in the short term.  Currently, Social Security takes in
billions of dollars of surplus every year which are already invested in
government bonds, the safest investment in the world.  Benefit payments are
not in jeopardy due to a sudden rise in unemployment.  The Trustees
predictions already rely, in fact, on an increase in unemployment over the
current level (which has existed for the past several years under the
Clinton Administration).  Now, if significantly large numbers of people
become unemployed for several decades that would, of course, affect Social
Security and all other government spending.

Thank you.

Representative Nadler