LA Times columnist Michael Hiltzik (Bradenton Herald April 6) accuses House Budget Committee Chairman Paul Ryan (R-Wis.) of misrepresenting the value of the Social Security trust fund by stating it is just government accounting, and nothing is there.
He details the FICA tax history and the full faith and credit bonds held by the trust, stating there is no safer investment.
However, the trust fund is part of the federal system. Holding bonds there is not the same as holding bonds outside government. You cannot solve your problems by lending/borrowing money to/from yourself, and interest accrued or paid on such bonds is not income.
Ryan is right, it's just accounting and politics.
Consider this. If the U.S. had used even more of the FICA taxes for other purposes, and issued twice as many full faith and credit bonds to the trust, would the trust then last twice as long? It's absurd to even suggest that.
The treasury pays Social Security benefits solely from currently levied and collected taxes, or borrowing, either directly paying or through the Social Security Trust Fund.
However, trust fund or not, long-term Social Security must be reformed, or the demographics will bankrupt us. It must pay more to those who need it and less to the wealthy.
Is Social Security simply a government-mandated and -administered personal savings account, or is it a social program to provide a decent standard of living to the retired or disabled?
I propose that we base benefits on time worked, not dollars paid, and have a reasonable maximum. Anyone working all his or her life would get the maximum. Who earns it, needs it, and deserves it more than the minimum wage worker who worked all his or her life, and had no spare income to set up IRAs.
John A. Ristow