Re: Tyler Cowen’s Bloomberg Opinion column “Social Security isn’t doomed for millennials, Gen Xers” (Nov. 13):
His premise is highly dependent upon one of two things happening: Either the electorate will agree to a tax increase to cover the shortfall, or it will agree to allow the federal government to bail out the system. Neither is a certainty, but, more to the point, neither would solve the problem but would simply push the ultimate solution further into the future.
I disagree with Mr. Cowen’s assertion that the Social Security system is not bankrupt. While a 22 percent increase in the tax rate might cover the current shortfall (a dubious proposition, given Congress’s historical propensity to grant retroactive benefit increases), the fact is that 17 percent of scheduled benefits are unfinanced.
If the system were being run by a private life insurance company, state regulators would have shut it down long ago for being technically insolvent. This situation is no different from that of California, New York, New Jersey and Illinois, whose underfunded state pension plans have led to the highest taxes in the land.
Michael A. Smith
Wells
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