The Ferrara plan would allow workers to invest in private accounts a
small amount at a time. Along the way, if one would go wobbly one could
switch back to the current system and be guaranteed full benefits. If
one compares what the current program pays (an average of $900 per
month) to market-driven accounts when fully funded one would look at in
all likelihood $3,500 a month vs. $900.
Advocacy of reform is supposedly the third rail of American politics. To
touch the third rail of a heavy rail line in Boston, New York, Newark,
Philadelphia, Baltimore, Washington, Atlanta, Miami, Chicago, Los
Angeles or San Francisco while one is grounded means certain death. The
liberals have sold the line for years that Social Security must remain
untouched, lest the reform advocate die a sudden political death. But as
the pollster John Zogby has pointed out, all of the advocates for reform
won their elections in both 2002 and 2004. People are ready for reform.
Ferrara demonstrates that his plan will lock surpluses to be used to
fund the transition to the private-account plan. Surpluses presently are
used to fund all sorts of completely unrelated programs. What is left is
a raft of IOUs in the Social Security account. Those IOUs must be funded
by general revenues which simply are not there. As the Bush
Administration has demonstrated with its tax reductions, cutting tax
rates brings in more revenue, not less. Were the majority of people to
own their own accounts it would amount to a huge tax cut. Finally
Americans would be saving more money than they were spending.
Ferrara demonstrates in various advocacy papers for this kind of Social
Security reform that families will come closer together because of it.
Right now if I die my widow would not collect my Social Security even
though I have worked for it most of my life. Under Peter's plan she
would be able to inherit the account, which would be very helpful upon
my demise.
One of the best aspects of the Ferrara plan is that it would eliminate
the long-term deficit which the System now faces. Because Ferrara would
hold harmless anyone who did not wish to make the switch I find no
downside to his plan. The problem is the lack of will on the part of
politicians.
President Bush, in the beginning of the 109th Congress, made an attempt
at Social Security reform. His plan was anemic compared with the Ferrara
plan, which is why he got nowhere with it. Depending upon the outcome of
the elections, perhaps the Lame Duck President Bush and someone who ran
on a Ferrara-type reform and won, someone such as Senator James DeMint
(R-SC), would bite the bullet and step forward to work hard for these
reforms. The wrong winning crowd would kill any such proposal. If the
right crowd unexpectedly should hang on, this might be their opportunity
to show some political courage. If that should happen we can thank
Ferrara for hanging in there all these years.