RE: Darcy Olsen's Cato plan is very bad

[Richard Arsinow <richard.arsinow@rauland.com>]

Ms. Hartmann:

You have called Social Security "a system in which funds are transferred from men to women".

You have criticized every proposal which gives working women (and men) any degree of control over how their retirement assets are invested.

You seem to lobby for the continuation of the entire Social Security as is, except for additional benefits which you'd like to see added.

You don't accept the fact that it cannot, without significant tax increases, continue to pay benefits at the promised levels indefinitely.

You don't acknowledge that young working women will never get out of Social Security even as much as they put in (a loss - a negative return).

Now you state that the Cato Institute's plan "would be very bad for women" and that "women are better off with Social Security the way it is than with very risky alternatives."

Remember that "Social Security the way it is" will be unable to meet its obligations in around 36 years.  That is what this forum is all about.  Sure, you are satisfied with the benefits of "Social Security the way it is", but what about the costs?

The Cato plan does not need to be a very risky alternative.  Young women's individual accounts could be invested in, say, Treasury bonds, equivalent in risk to what the Trust Fund invests in.  They would still receive a better return than they would under Social Security.

You ask why any generation would want to support two retirement plans.  It's because the underlying flaws in Social Security have been recognized, and only if we act now is it possible to spare future generations from paying for two retirement systems---and receiving less than one in return.  Cato Institute and other organizations and individuals feel that there is a limited time opportunity to replace Social Security with a system which is far simpler, easier to understand, fairer, secure because it is self-prefunded, more flexible, and provides a much better return on contributions for future generations.  The current generation may do about as well as under Social Security, having to pay for the transistion, or maybe a little better, but if we don't act soon we'll be heaping unbearable debt on our grandchildren.  That's what you do when you support "Social Security the way it is".