RE: Questions for Sam Beard:"Investor's License

[National Dialogue Moderator <moderator>]

The crux of the current debate is now a question of who will invest
the income to Social Security, not whether or not to invest in
private markets.  Should the government invest the Trust Fund as
a lump sum and divvy up the proceeds among retirees based on the
current defined benefit plan, or should individuals own a portion
of their payroll taxes and rely on a defined contribution for the
income to their Personal Retirement Accounts?  I believe that we
should allow individuals to own their accounts to avoid politicizing
the Trust Fund.

The basic principle is to preserve the promise of a decent retirement
income.  The promise of a safety net level benefit must remain to
cover the difference for those individuals with poor investment
returns or who face the downturn of a recession.

Studies show that private investment over any 45 year period provides
positives rates of return.  Take any 45 year interval beginning in
1900.  An individual joins the workforce in 1900 and sets money
aside into a personal investment account.  The stock market goes
up and down through bull markets and recessions.  By 1945, at
retirement, the worker is better off -- including the effects of
the Great Depression.

Finally, I think the danger in leaving the system as-is lies in
the fact that the system cannot support itself in its current form.
There are no current guarantees.  When the baby boomers retire, we
are facing significant demographic changes.  Families are having
fewer children and living longer.  If we do nothing, we face a 32%
benefit reduction or a 50% tax hike.  In addition, as a nation we
suffer a savings shortage as the gap in income and wealth distribution
widens.

Sam Beard