From: Richard Arsinow <richard.arsinow@rauland.com>
Subject: What guarantee, Mr. Shea?
Mr. Shea, in your position paper you speak of how investing retirement funds in private accounts is risky, while the current Social Security program provides "guaranteed benefits", and you use this as an argument against private accounts.
The funding for future benefits is far from being guaranteed. In fact, that is the primary reason for this forum. Individual accounts used to prefund future benefits are proposed to help reduce reliance on taxing future generations.
Sadly, at present, Social Security benefits are not guaranteed. It was pointed out in one of the other discussions that the Supreme Court has ruled that a worker has no right to Social Security benefits earned by years of contributions. This ruling and the insecurity of future funding, along with the dismal and soon-to-be-negative return on contributions, has eroded much of the popular support which Social Security once enjoyed.
You propose raising the earnings cap for contributions. Without a corresponding increase in the maximum benefit, such action will further erode popular support.
You have not stated a position on means testing. Please do so. I hope it will be that you are firmly opposed to it. Advocating any sort of means testing flies in the face of the "guaranteed benefits" you prize so highly. Means testing is a disincentive to saving and investment for retirement, and would certainly erode what little is left of popular support for Social Security.
