To the editor:

President Bush and many Republicans in Congress would still like to privatize Social Security. If even 1/3rd of the Withholding Tax is diverted to personal retirement accounts, the current Social Security Fund will be out of money within a decade and the promised disability and retirement benefits will have to be reduced drastically. If 1/3rd of the Withholding Tax of the low paid workers goes to private accounts, they will be destitute when they retire because they will have been unable contribute much to the accounts. This is what happened in Chile and Great Britain when such a scheme was tried. A welfare system had to be instituted to save the poor. Privatizing a significant portion of the Withholding Funds will destroy our current Social Security System, the only safety net many of our citizens have. Fortunately, a recent survey of voters showed that  60% know that privatization will destroy Social Security.     

Congress and the President have foolishly spent much of the money the government  borrowed from the Social Security Fund. This does not relieve them of the obligation to pay back this loaned money to the workers. If it is not paid back, Withholding Tax will have been a flat regressive tax on our workers. There is $ 1.8 trillion credit the Social Security Fund. So, in spite of there being fewer worker and more retirees in the future, the fund will be solvent until 2042 if it is paid back. This is because of the money continuing  to come into the Fund from Withholding Tax and interest, approximately 4%, on the non-negotiable bonds issued to the Fund for the money loaned to the General Fund. However, by passing a simple law the credit in the Social Security Fund can be cancelled. Many who want to destroy Social Security pretend that this has already happened.

Albert A. Gabel
Professor Emeritus
Ohio State University