Word: program
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Dates: during 2000-2000
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Social Security, for years untouchable on the sidelines of American politics, has finally been called into play in this election. Unfortunately, fear of an oncoming collapse has given strength to those who call for speculative, unworkable and possibly very unfortunate changes in the program's fundamentals. Social Security must be patched up through wise economic policy, not through appeals to magical market forces; specifically, investment of social security funds in private securites is not likely to improve the system's finances and would only further the political agenda of its advocates...
...money could then be invested in stocks and bonds, as has been advocated by Bush advisor and Baker Professor of Economics Martin S. Feldstein '61. Feldstein has argued that private investments will create a "All-Gain, No-Pain" fix for Social Security, as the swirling stock markets buoy the program to higher and higher returns. Yet pleasant fantasies may not serve as the basis for future policy, and there are several persuasive reasons why such painless gains will not be realized--and should not be pursued--outside the theoretical realm...
...return with seven percent returns from stock investments ignore the cost of pre-funding the system. As Barro has written, Social Security's return is so low--lower, in fact, than the Treasury bonds in which it invests-- because today's workers must pay for today's retirees. No program that takes money out of the system and puts it into private accounts can avoid the obligation to pay for current retirees, which would lower the returns. Bush's repeated comparison of the returns on Social Security and safe government, which surfaced again in the first presidential debate, therefore approaches...
...contrast to Bush's large-scale reforms, the Social Security proposals of Vice President Al Gore '69 have been far more modest, consisting mainly of using the Social Security surplus to reduce government debt (the infamous "lock box") and a commitment to prolong the program through 2050 with general revenues--which must come from other taxes or from deficit spending. Gore has also argued in favor of a separate program to match the savings of lower- and middle-income Americans with tax credits. This proposal, which would improve personal savings in a progressive way, deserves serious attention...
Credit for the decrease can also be given to better enforcement and administration of the loan program by schools, Glickman said...