Investing Social Security Funds in Stocks

On reading your Jan. 8 editorial (“Saving Social Security: a Role for Stock Funds”), I wondered whether I am the only person in the country who understands that the basic problem with the Social Security system is that the federal government has taken the surplus generated year after year and replaced the cash with an IOU. I knew the interest the fund was credited with was small, but was even further dismayed to find that it is a ridiculous 2.3%!

If the federal government would begin, even now, paying an interest rate on the money it has borrowed commensurate with current market rates, would the fund still be in trouble? I would suggest that the Treasury rate paid for 30-year bonds (currently 6.78%) would be appropriate. It should be adjusted annually thereafter.

As a recent retiree, I would feel more comfortable letting the federal government continue to use the money rather than subject the funds to the uncertainties of the stock market or other privatization schemes. However, I believe that the federal government should pay a reasonable rate.

GORDON E. STEWART

Redondo Beach

After reading your editorial, I have a comment and an admonition: What portion of the funds do you suggest we take to the race track? Remember 1929.

ROBERT PROFACA

Long Beach

If Social Security benefits continue to be taxed, which they will, why not put the dollars back into the fund? Just keep some of the dollars in a revolving door, taking from those in a higher tax bracket and redistributing them to those in lower or zero brackets.

While this is not a cure-all, enough could be recycled to keep the fund going in the black for a few more years. For some people in higher tax brackets, as much as 34 cents on every dollar they receive would go back into the fund.

So how come no one presented this simple way of prolonging the system? Could it be that it’s too basic and no one outside the system can earn a buck on it?

MARVIN BIERS

Tarzana

Re “No Security in ‘Personal Security’ Plan,” Commentary, Jan. 6: Theodore R. Marmor and Jerry L. Mashaw are sure mixed up about Social Security. How much security is there in the present Social Security plan?

They say the “Social Security pension fund is now accruing large surpluses.” (True.) “Total income will exceed outlays until about 2020. After that, retirement of the baby boomers will begin drawing on accumulated reserves.” Where have these two been?

Don’t they know that the government raids every surplus penny there is in the Social Security Trust Fund, taking $60 billion every year and putting in an IOU? In 2020 when the baby boomers look to begin drawing on the “accumulated reserves” all they will find is $1 trillion worth of government IOUs. What good will that do the baby boomers? Wake up, you two.

BOB BEMILLER

Glendale