Concerns about Social Security, economic stability

To the editor:

Social Security is a major issue that all Americans face today. Although it was once a highly effective system, an increase in those retiring and a decrease in those working gives cause for struggle. There are becoming fewer people to pay taxes toward supporting current retirees. Within the "Coming Generational Storm" (2004), Laurence Kotlikoff and Scott Burns presented detail after detail in order to demonstrate the peril that the Social Security system is in today, but they had no idea what was going to occur only a few, short years later.

Within the past few weeks, "congressional officials said they expected a request for legal authority to buy up bad loans," says the Huffington Post. Currently, these "bad loans" are estimated to equal about $700 billion. This huge sum of money will save several failing corporations, such as AIG and Fannie Mae, but also pose new problems. This $700 billion has to come from somewhere, and this amount is much too high to tax the American people with. The proposed solutions include printing the money or borrowing from China. Both bring about their own problems. Printing money will devalue the dollar even more than what it is today, and borrowing money from China will not only give them the "higher hand," but also leave the U.S. even further in debt.

This $700 billion bailout affects every issue throughout the 2008 presidential election, but especially Social Security. Both Barack Obama and John McCain offer diverse solutions for this crisis. According to the Washington Post, John McCain proposes to supplement the current Social Security system with personal accounts. He wants a portion of the money currently withheld for Social Security to be placed into private accounts. It may sound like a good solution, but where is that extra money going to come from? McCain has said that he will not raise taxes, but what other solutions does that leave? Somehow, more money must go toward the Social Security system in order to use the private accounts that he speaks of. Unfortunately, that money is not going to magically appear. With the new bailout, the likelihood of money being available has greatly diminished. The U.S. is going to be even further, $700 billion, into debt. The use of the personal accounts that John McCain proposes seem nearly impossible with the possibility of a bailout of this magnitude in the near future.

Barack Obama disagrees with John McCain's solution to the Social Security crisis and believes that the best option is to "ask the highest income Americans to contribute a little bit more by raising the ceiling that is currently paid on the amount of earnings subject to the Social Security tax." Since the government only taxes the first $102,000 that an individual makes, a person making $200,000 is paying the same amount as someone making $1,000,000. Obama understands that having the "wealthier" people of America contribute more toward Social Security is not only a good idea, but also a rational solution. The Washington Post demonstrates how Obama's "Doughnut Plan" will allow taxes to be imposed on those making over $250,000. There will be a "doughnut," or gap, between $102,000 and $250,000 where no taxes will be paid.

Obama's solutions to the Social Security crisis seem more legitimate considering the $700 billion bailout. As much as America does not want to hear it, tax raises are inevitable. Taxing those making over $500,000 will not only aid in saving the Social Security system, but it may also contribute to a lessoning of the debt America will face following the bailout. Even a small amount of money raised through taxes can affect how much is borrowed from China or required to be printed. Less money borrowed is less debt, and less money printed is less inflation. Overall, the tax raises that Barack Obama speaks of can not only help the Social Security crisis, but also the current $700 billion bailout.

Whether it is Barack Obama or John McCain, a resolution must be found to end the Social Security crisis within the United States today. The ideal solution would also help counteract the amount of debt America will possess after the $700 billion bailout. Social Security was an issue within the United States before, but it is at even more risk now that Congress is about to spend $700 billion toward restoring failing financial corporations. Action must occur immediately in order to not only save the Social Security system, but the economy of the United States as a whole.

Jessica Owen

Editor's note: Jessica Owen in a Lincoln resident studying at Eastern Illinois University.

[Posted September 29, 2008]