The Daily Hatch

In his article “Harry let us down,” (Arkansas News Bureau, April 4, 2011) John Brummett observes:

The liberal is correct when he says Social Security is a separate insurance program that is solvent. Alas, Senate Majority Leader Harry Reid let us down in this regard the other day.

He spoke the truth that Social Security is fine. Then he declared with the liberal’s harmfully stubborn polarization that he wanted Social Security left alone in the ongoing debt and deficit discussions and that he would worry about it in a couple of decades (when he would be in his 90s.)

Is the Social Security System fine? The most glaring problem I see with that statement is that most young people in this country do not see a good future for their investments in this program. Take a look at the observations made by Congressman Paul Ryan:

I’m 40 years old. I’ll get about a one percent return on my payroll taxes. If Social Security could pay me my benefit, which of course it can’t, my children who are five, seven and eight years old will get a negative one percent rate of return on their money. And I would argue that Social Security is probably one of the most successful programs ever created, and it’s popular because multiple generations value it. If my kids are going to get a negative one percent rate of return on 13 percent of their payroll taxes basically, do you think they’re going to continue to support the program?We should provide future seniors with the choice of having a personal account, like I have as a Federal employee, as a Member of Congress. It’s not privatized. It’s managed by the government in safe index funds. It harnesses the power of compound interest so they grow their money at five or six percent a year instead of negative one percent a year. They get better benefits. It’s a nest egg they own and control. It is their property.

My dad died when I was a kid. My mom got his Social Security benefits. She had to forego all those taxes she paid when she worked as a lab technician in Milwaukee. She lost that because it went back to the government. So there are inequities in the system right now and I think that can be fixed with personal accounts. If you don’t like them and you don’t want them, then don’t have it. I just think it ought to be an additional voluntary option, but it is not necessary to actuarially solve this problem. I personally think it’s preferential for younger people to have the option so they get a better deal, so they get a better benefit, so that we don’t consign them to a miserable rate of return.



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Free-lance columnist Rex Nelson is the president of Arkansas’ Independent Colleges and Universities. He’s also the author of the Southern Fried blog at rexnelsonsouthernfried. com.

Rex Nelson wrote in the Arkansas Democrat-Gazette on April 2, 2011 a great article called “Arkansas Bucket List.” The readers of his blog http://www.rexnelsonsouthernfried.com came up with a list of things you must do at least once in your life to be considered a well-rounded Arkansan. Nelson asked others to add their suggestions at his website. I am going through the list slowly.

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1.  Sit in a deer stand on a frosty November morning in the middle of the pine woods of Dallas County. Afterward, go to lunch at Klappenbach Bakery in Fordyce.