Discussion Questions

[National Dialogue Moderator <moderator>]

	    DISCUSSION QUESTIONS--by Carolyn Weaver

As both a panelist and a moderator, I'd like to pose a couple of 
questions.  They are questions we hear all the time, whether from 
policymakers, policy analysts, or ordinary citizens.

First, "What if we had another Great Depression or at least another 
rotten period like we had in the 1970s.  Wouldn't a system of personal 
accounts collapse?  How can you guarantee people that they won't end 
up with nothing?"

Second, "Even if we have personal accounts, we ought to change the 
investment policy for the trust funds. It just doesn't make sense to keep 
the social security funds invested entirely in low-yielding government 
bonds. With all the financial expertise now available, it ought to be easy 
to figure out how to ensure the government invests in a neutral way, 
without any political interference.  How can it be done?"

While I have a few thoughts of my own on these questions, we would 
benefit from hearing yours.  Thanks.

On a point of ongoing discussion, the Burtless findings on replacement 
rates, a couple of participants have commented on how his estimates 
for an investment-based system, even though prepared in a manner that 
exaggerates volatility, stack up pretty well compared to those projected 
for social security.  You make a good point and one that can be 
strengthened.  The replacement rates you refer to, the ones the Social 
Security Administration projects under current law, can not be met in 
future decades with the current level of payroll taxes.  If the nation 
sticks with pay-as-you-go financing, benefit levels and thus replacement 
rates would have to be reduced significantly to close the long-range 
deficit. 

Also, stay tuned for more.  There have been a number of questions and 
comments relating to social security's unfunded liability, the national 
debt, and transition costs.  I've taken note and do plan to respond. 

Carolyn Weaver