Driving from my home in
As a former Upper West Side Manhattanite, I once was accosted by the very same diminutive Democrat at my
Of all the functions traditionally reserved for government, none is more sacrosanct than Social Security. Yet a 1994 poll found that more people in their 20s believe in UFOs than think they will collect a dime in Social Security benefits. And the doubts are increasing each year. A Wall Street Journal/ABC News poll published last year indicated that 29 percent of all Americans expect to receive nothing from Social Security when they retire.
The critical year is 2011. That’s when the first of the baby boom generation turns 65. As more people of this group retire, Social Security expenditures rise sharply. By 2012, the outgoing payments will fly past the Social Security Trust Fund income. By 2019, tax revenues plus interest on the trust fund will no longer be sufficient to pay for promised benefits. That means payroll taxes would have to rise from the current 12.4 percent to 18.8 percent, the Trustees estimate. Otherwise, benefits would have to be cut sharply.
Privatization may be a dirty word in Elizabeth Holtzman’s book, but not in Jose PiÃ±era’s. He served as
In his Capital Ideas column, Pete du Pont argues that CEOs have a stake in privatization. Aside from giving workers true social security as opposed to phony IOUs, privatization would push growth rates up as the savings rate increases and the cost of capital decreases. This being an election year, neither presidential candidate is entirely willing to touch the so-called “third rail” of politics, but the debate has been joined. The 105th Congress and the President, whoever he is, will have to face it. The question is, will he take his cue from a Holtzman or a Pinera?