<P>Private accounts no help to Social Security

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Private accounts no help to Social Security

by Ari Armstrong, December 29, 2004

The following appeared as a letter to the editor of the Rocky Mountain News.

In its Dec. 21 editorial, "Details on Social Security, please," the Rocky Mountain News claims, "Private accounts are certainly a key component to restoring Social Security to health." The News' statement is wrong on three counts.

First, the accounts proposed by President Bush are not "private"; they are mandated and regulated by the national government. Forced savings controlled by Congress is the opposite of free-market reform and privatization.

Second, mandatory accounts are completely irrelevant to the reform of Social Security, as economists Jeffrey Miron and Kevin Murphy explain ("The False Promise of Social Security Privatization," May 2001, http://ssrn.com/abstract=270245). Whatever money Bush wants to redirect to mandatory accounts could simply be returned to workers to use however they want.

Third, Social Security was never in a state of "health," so it cannot be restored to one. It imposes a horrendous burden on America's working poor and middle class.

Social Security should be phased out by continually raising the payout age or by incrementally reducing benefits (preferably starting with the rich). Phasing out Social Security would be the equivalent of a 14 percent pay raise for the working poor and middle class.

For additional analysis, please see Social Security: Collected links.

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