Social Security: The Only Pyramid Scheme That Doesn’t Land You in Jail

To paraphrase the old “duck” axiom: If it looks, sounds and walks like a pyramid, it is a pyramid.

Thank you for stating (James Flanigan, “Time to Take Stock of Social Security Funding,” May 19): “Under the system that has operated since 1936, one generation’s taxes pay for the previous generation’s retirement.”

I suggest you now consider pointing out that anyone else operating a similar “pyramid” system would land in jail.

DONALD FRANK

Corona del Mar

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All of the present agonizing and debating over ways to render our Social Security fund solvent well into the future overlooks the simple, long overdue, relatively painless solution of simply increasing the amount of earned income subject to taxation from $62,700 annually to $100,000.

How much additional income would this produce for the Social Security fund? What would be the projected effect on the fund’s (in)solvency?

Chasing the fantasy of stock market profits is a sucker’s game and a pork barrel for the large financial houses. The idea should die aborning.

Incidentally, wouldn’t an increase in the minimum wage produce a windfall for the Social Security fund and also the budget by increasing the amount of income subject to both taxes?

WILLIAM B. BUCHMAN

Redondo Beach

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The proposal by a presidential advisory panel to invest the Social Security trust funds in the stock market is intriguing. Of course, to the extent that the federal government doesn’t sell its own bonds to Social Security, it will have to float those bonds in the private market. In effect, the government will be floating relatively risk-free federal securities to buy up private shares. According to your article, the bonds will cost the Treasury 6% per year but will return 10% in the stock market, a net gain of 4 cents on every dollar borrowed!

So why stop with making a profit for Social Security? Why not cover the entire federal deficit, about $5.150 trillion, by borrowing to buy up $3.75 trillion in private stocks? Indeed, why stop there? If the government bought up all the shares on the New York Stock Exchange, it could enjoy a handsome surplus. And I’m sure there are some ex-officials of Orange County who would be happy to oversee the new program.

DANIEL J.B. MITCHELL

Professor, Anderson Graduate

School of Management and School of Public Policy and Social Research

UCLA