We've Got Really, Really Bad Roads Around Here

Okay, maybe they aren't quite as bad as the photo above. However, there is a section of Meridian Rd. at the light where it crosses Salt Springs Rd. that is quickly becoming an auto parts graveyard. The section of road heading south before the traffic light has buckled, cracked and risen to become a challenge even in my 4x4. There is a collection of hubcaps and mufflers on the side of the road that have literally been shaken loose from the cars to which they were once attached. Further up the road, where it crosses under I-680, the concrete has been destroyed by the winter weather. Unfortunately, concrete does not break up as nicely as blacktop so when you hit one of the holes that has opened up, you are treated to a jarring slam instead of an incovenient bump. If you are drinking hot coffee at the time it could become a life altering event.

I know Ohio is famous for bad weather and even worse roads but the Mahoning County engineer needs to get a crew out there before someone is lost in the canyons now forming. I'm afraid that spring will come and some poor soul will climb up out of one of those holes with a tale of surviving the winter on roadkill and some crackers hidden in his glove compartment.

Social Security & Private Accounts

I have been watching the news concerning Social Security reform and privatization for several weeks with a growing sense of weariness. These two issues are beginning to polarize the left and right camps in America and once again the people are going to be treated to sound bites and attack ads rather than the debate that should take place.

There really are two issues here. The first is that the Social Security program is going to stop running a surplus within a couple decades and begin to pay out more money in benefits than it collects in taxes. The second issue is that there are a growing number of people in this country that would like to have more control over how their taxes are invested so that they can have the opportunity to possibly increase their benefits.

The first issue is simply a matter of math. More taxes will have to be taken in to pay the current benefit level or benefits will have to be reduced to keep the taxation level at the current rate. You have "X" dollars going out and "Y" dollars coming in. There isn't any fancy accounting that changes that fact. We also need to keep in mind that Social Security is funded by payroll taxes paid by the employer and employee. Cutting defense spending or Federal Head Start programs will not increase the revenue available to Social Security.

Private accounts, though, may help everyone make tough choices about the funding and payment of Social Security benefits. The President's plan would allow workers to invest their percentage of Social Security tax (currently 6.2%) in private accounts. The problem with this view is that the same amount of money is being invested for the worker's retirement. They just have a say in how it is invested. The goal should be to increase the gross amount of money being put away for retirement. Most companies offer some sort of retirement plan, whether it is a traditional pension or a 401k plan. Everyone can open an Individual Retirement Account (IRA) with very little starting capital. The problem with each plan is that they are taxed in some way. 401k plans and traditional IRA's allow workers to set aside money and then tax funds when they are withdrawn. Roth IRA's allow workers to contribute money after income tax has been paid and then withdraw the funds and the interest generated earnings without further taxes.

Why not combine the best of all plans and allow workers to set aside money in retirement plans like 401k's and IRA's completely tax free? Under this plan workers would be able to set aside a percentage of pre-tax earnings and then withdraw them upon retirement age without taxes on the earnings. These contributions would be in addition to Social Security taxes. This allows workers to choose their investments, control the risk level of their investment and increase the funds available for retirement. It also pumps billions of dollars into the stock market which leads to economic growth. The greatest advantage will be in how this helps deal with the anticipated Social Security shortfall. If benefits must be reduced or taxes raised, the shortfall can be made up with private investments. A small amount of money set aside in tax free accounts over three or more decades adds up to quite a bit of money for retirement. It may even allow Social Security to become a means tested program.

The downside to the plan is that the government will take in less income tax revenue. Well, the Conservatives live for reducing taxes and Liberals get one of their greatest programs a measure of protection. Both sides will have to start making cuts in the budget to make up the difference.

If both sides believe what they say and are true to their natures this is an acceptable compromise. It serves the Conservative's need for personal choice and control while allowing the Liberals to continue making sure that the elderly and infirm have a guaranteed standard of living.

What we all have to keep in mind is that this affects every worker in America. It's not about left or right or whether you back President Bush or despise every word that he utters. We need the people in Washington to look at every option and make the best decision possible. Frankly, when it's all said and done the changes these people make will not take effect for years. By the time we find out whether they were right or wrong they will be out of office and living off government pensions most of us will never have the pleasure of receiving. We need to make sure our best interests are being looked after.

So get interested, write your congressman and call your senators. Ask them the really tough questions and hold their feet to the fire. Demand tax free retirement savings. Ask them why more isn't being done to increase the overall amount of money available for retirement. Make them understand that you are not going to be satisfied by attack ads and headlines that gloss over the issue. This is your future, not a football game. Your side winning may not protect your interests. Be informed and protect yourself.

Right now.