RE: Sorting out the issues

[RRand98163@aol.com]

Dear Congressman Stenholm,

Your post today shows an alarming and frightening misunderstanding
of the financial problems of Social Security and contains many
factual misstatements. If appropriate legislation is passed is
passed to eliminate the 2.1% imbalance between taxes and benefits,
the Trust Fund operations will pose absolutely no danger at all to
the rest of the budget nor to the economy.

You state that the system will begin to run annual cash shortfalls
beginning in 2014. But that is part of the financial plan.  While
the baby boomers are working and paying taxes, a substantial reserve
is being accumulated. When they begin to retire , taxes on the
working generation at that time will not be adequate to pay all of
their benefits but together with interest and principal withdrawals
from the Trust Fund, the benefits will be covered.  There will be
a small Trust Fund left after the baby-boomer retirees are gone,
but only if the 2.1% shortfall is removed. Surely you must have
been aware of that plan when you made your misleading statement.

You state that present projections show that the government will
have to redeem seven trillion dollars of bonds held by the Trust
Fund. The projections show the Trust Fund reaching a maximum value
of 1.5 trillion before it begins to diminish. Your seven trillion
figure seems pure fantasy.

Senator Gregg, whose comments you endorse, says that the tax rate
will reach 18%. If the present shortfall is closed solely thru
increased Social Security taxes, the tax rate would be 14.5%.  More
fantasy.