RE: What "values" created the existing system?

[Michael Jones <powderfinger99@yahoo.com>]

<<<
I must say that I disagree completely with Michael Jones' comments
on my comments. He says that the real question is not whether the
present system can be sustained with appropriate changes but whether
it can be sustained with no changes at all. This is simply wrong
and stupid.  The design of the system and the law have always
contemplated changes when deemed necessary and wise. The very
purpose of the annual 75 year projections is to determine if the
benefits and taxes are in balance and, if not, what changes are
appropriate. No sensible supporter of Social Security has ever
contended otherwise. The need for changes does not mean that a very
successful system should be foolishly discarded.
>>>

Rand,

What I was trying to explain is that it is possible to sustain
the system indefinitely, because the government can change the
"rules" of the game at anytime. But what would the system
of the future look like? Would it be satisfactory to the majority
of people?

The question is, what changes would be required, and what
would have to be sacrificed? 

The orignal rules of the system only required 2% tax on payroll.
The current system requires a tax of 12.4% of payroll. How much
more are you willing to be taxed to support the system?

The original rules required only a payroll tax on the first $3000
of income. The current rules require paying the tax on income
up to $72,400. How much more are you willing to be taxed to
support the system?

The current system will only pay about 70% of current (inflation 
adjusted benefits) in 30 years. How much less than 100% of benefit
are you willing to accept?

The current system pays retirees about 1-2X contributions. The system
in 30 years will pay <1 X contributions. How much investment
return are you willing to give up?

The current system pays full benefits at age 65. In one year, the
retirement age will be increased to 67 to get full benefits.
How much longer are you willing to wait to get full benefits?

Changes would almost certainly put more seniors into poverty.
This would increase the amount of welfare benefits required
to keep these people afloat. How much more are you willing
to pay in income taxes to support these seniors?

What changes would you recommend to keep the system solvent
and "successful"?

<<<
He like many other proponents of scrapping the present system does
not mention the real problem in changing to a system of personal
accounts, and that is the transition cost, the unfunded liability
for benefits accrued to date under the present system amounts to
six trillion dollars, larger than the current Federal debt, and
would have to be provided for in some way.  Those who advocate
changing to personal accounts without dealing with the transition
cost problem are dishonest.
>>>

There are many examples of other countries (such as Chile) and
even other private and public institutions which have successfully
transitioned from a pay-as-you-go system to a system of private
accounts. I recommend that you read the report on how Chile
and other organizations did it at: http://www.socialsecurity.org

Michael