Personal savings vs. social security.

I thoroughly enjoyed your recent cover story on the flagrant Social Security dilemma, including the article "Weighing Benefits" by Thomas R. Eddlem (February 21 issue).

Your articles, though, failed to emphasize enough the additional tax burden and bureaucracy included with Bush's privatization plan. How much taxpayer money is going to be required to create and manage 200 million-plus private accounts within the Social Security system? How many more government employees/bureaucracies will be required to operate and manage these private accounts? Why would we even desire to attempt to have private accounts within the Social Security system? They will never truly be private accounts when the government is the "custodian."

Your articles also failed to emphasize that we need more individual responsibility and saving for our own retirements, and less reliance on income redistribution through Social Security. We need to discipline ourselves, when we are working and generating income, to create our own private retirement accounts. The Social Security System was never designed to be a retirement plan. We need to begin relying less on Social Security and more on ourselves.

JUSTIN P. ERTELT

Fargo, North Dakota 

I just read your cover story on Social Security. The investment figure you used was 10.6 percent of income going into a private fund. The president's plan only allows 4 percent of income to be invested in a private fund, so your comparisons are misleading. The government will limit what funds people can put their 4 percent into, so why doesn't the government just put that much money into those funds now?

Right now all the excess money being paid into Social Security is being borrowed by the federal government and backed by Treasury Bonds. Morally, those bonds should be repaid. However, I suspect the federal government is looking for a way not to have to pay on those bonds because the government will not be able to pay off those bonds without raising income taxes. Those bonds pay good interest and are the most secure investment in the world.

We may oppose Social Security on ideological grounds as we oppose socialism. However, the program is here to stay. I think the Social Security tax rate should be reduced, all income should be subject to the SS tax, and the benefits should be means tested. Bill Gates and Rush Limbaugh shouldn't get Social Security; it is for the truly needy.

LARRY SCHANZ

Springfield, Oregon

The purpose of the cover story was to compare Social Security benefits to those of a genuine private account receiving the same level of funding; the purpose was not to compare the present system to the president's proposal. We therefore based our calculations on that part of the FICA tax now going to the Old Age and Survivor's Income fund of Social Security, which is 10.6 percent of income, half of it "contributed" by the employee and the other half by the employer.

Our cover story went to press just one clay after President Bush promoted his partial privatization plan in his State of the Union Address. As we noted at the time, "specifics about the Bush Social Security 'reform' program have yet to be announced." However, we also pointed out that "most pundits expect a modest proposal" and expressed some concerns such as: "Would the so-called private stock fund really be private?"--Ed.

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