Social Security needs open conversation

Every so often a major economic or social issue is brought up by one of the political parties, and, more often than not, both sides have good arguments to support their points of view. Invariably, in their desire to win, the extremists in the opposing camps begin to create alarmist scenarios to scare the public into supporting one proposal over the other. We are currently witnessing this phenomenon in the debate over Social Security.\nOne side contends that Social Security is in the midst of an economic crisis that will result in the failure of the program. It estimates that Social Security will be solvent for between four and six decades. But after that time, the program would still be able to pay 70 percent of what it has promised.\nThe country has plenty of time to make reforms as they become necessary. Social Security is stable now because it is one of the few government programs funded by its own tax -- the payroll tax. \nWhen Social Security was reformed in 1983, one of the five recommendations put forth by a 15-member review committee was an increase in the payroll tax. However, instead of raising the payroll tax to cover only the needs at that time, the committee raised it by a much greater amount to accommodate for the retirement of the "baby boomers" in the 2010s. This created the surplus referred to as the Social Security trust fund.\nAccording to Paul Light of The New York Times, the plan was that the surplus funds would be invested in treasury bonds, giving the federal government more money and keeping income taxes low. When the "baby-boomer" generation retires, those bonds will be sold, the government will increase income taxes to pay the bonds, and the money will be used to pay benefits. This saved Social Security in 1983.\nThe current administration proposes private accounts, not because Social Security is in danger, but because it wants to avoid the rise in income taxes. Democrats counter that accounts add needless risk to the system. They assert that people will lose the security this program was meant to offer. This claim is an alarmist scenario. \nRisk exists, but not all investments carry the same amount of risk. The proposals for private accounts put individual retirement savings into only the safest forms of savings. Nearly all of the money will go to bonds. Ironically, most of the money will go to where the government has invested it for years; the only difference is ownership and returns.\nThere are many advantages to a privatized Social Security system. Unused benefits can be passed down to children. Private accounts generate greater returns. According to a study by the Heritage Foundation, a working couple making less than $26,000 each with children will receive benefits of $450,000 from Social Security compared to $975,000 at a 5 percent-per-year return. \nAt the same time, there are also disadvantages to a private system, including the enormous set-up costs and extension of government. Furthermore, private social security plans appear to have struggled in other countries, which should be carefully considered. \nThe debate over this issue is a nuanced one. Both political parties have marketed their positions in a way that has done a disservice to the public dialogue of this issue. Both sides have tenable positions and our nation needs honest discussion of these proposals in order to choose the best possible option. There is no urgent need to change Social Security now, but it can be made better. Our county's choice should be based on the strengths and weaknesses of the ideas behind it, not on rhetoric. This is the foundation of sound policy.