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Give them ownership, but think of them as children



Published: Thu, June 2, 2005 @ 12:00 a.m.



Give them ownership, but think of them as children

EDITOR:

What makes us human? It's not what you think. It's not our opposing thumbs, or our enlarged brain or our awareness of God. It is our ability to foresee the future. Humans are the only creatures on earth who can discern cause-and-effect. They can analyze the past and then project those revelations into the future.

We worship at the feet of seers. Progressives, environmentalists and visionaries hold sway over those of us who have succumbed to our baser instincts like fear and ignorance.

Why then don't we embrace President Bush's plan to privatize Social Security? Are we ignorant of the facts or just fearful of the future? When FDR started this program, he stirred the American people with a simple invective, & quot;The only thing we have to fear is fear itself. & quot; It was a slap at the naysayers of his time. He was a visionary. His opponents were of baser stock.

I have no invectives to allay your fears, but some facts might dispel your ignorance.

First, the rewards. A minimum wage employee, setting aside his full FICA deduction into Social Security, will receive, at retirement, a monthly benefit of $562. This equals 63 percent of his gross pay -- a very good deal.

President Bush's plan will take $214 dollars of that FICA deduction and place it in a private account. If the $214 is invested in an index fund that tracked the over all market, the account will increase to $89,425. At age 65, assuming the historic average return of 10 percent, the monthly benefit will be $745. Thus, setting aside 16 percent of the FICA tax yields a benefit 32 percent greater than the projected benefit under Social Security.

But private accounts are more than just rewards. There are risks which can't be ignored. The major one cited is the risk that the stock market will decline. Stock markets do decline. In the past 100 years, the Dow has had six major declines. A major decline is 30 percent or more. Except for the Great Depression decline of 1929, the average recovery from a decline is less than 24 months. If you retired during one of those declines, your account would shrink to $62,597 and the benefit would equal $521. Of course, this cut in benefits would only last two years. As the market recovers, your benefit recovers.

It is clear that the financial risk of private accounts is no risk at all. But there is a risk that is worrisome. I call it the reality risk. This is the risk that Democrats thrive on and Republicans are oblivious too. It is the reality that Americans will squander this retirement nest egg and then turn to the government to bail them out. To overcome this reality risk, President Bush needs to recognize that ownership is not the same as control. The president must see these accounts as owned by the retiree but controlled by the government. They would be trust funds like those set up by rich parents for their irresponsible children.

If the Republicans can see past their delusion that the average American is a financially responsible citizen and if the Democrats can heed the words of FDR, private accounts could raise the poor out of poverty, maintain the independence of retirees and create an ownership society which is vital to a free nation.

THOMAS MASKELL

Poland

Resist drug testing

EDITOR:

As a native of the tri-state area I wish to respond to the May 25 article, "Drug test sneaks up on Mayor Melfi."

In 2000, the Washington State Supreme Court ruled that city of Seattle employees cannot submit to a & quot;pre-employment & quot; urine test because it invades privacy.

In 2004, the Arizona State Supreme Court ruled that & quot;random drug testing & quot; of firefighters was unconstitutional.

In December 2004, the U.S. Court of Appeals for the Sixth Circuit ruled that welfare recipients cannot be tested for drugs.

The U.S. Supreme Court ruled in Chandler v. Miller, 1997, that elected public officials cannot be tested for drugs because it invades privacy.

People need to fight for their right to off-duty privacy by saying no to drug testing.

RANDY VIZYAK

Mukwonago, Wisc.




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