America’s 229th Birthday

Our Past. We are celebrating a rich and proud history that is steep in suffering and united by the sacrifice of so many lives of all political beliefs given in too many wars to preserve and defend our United States.

As we prepare to commemorate the 229th birthday of the United States of America, I suggest recalling the words of patriot Abigail Adams who wrote to her husband “future generations who will reap the blessings will scarcely conceive the hardships and suffering we’ve been through.”

These timeless words echo the history of individual sacrifices made defending the United States.

MICHAEL P. MULHALL
Point Lookout, N.Y.

‘Police Novels’

I read Otto Penzler’s column Wednesday [“The Essentials: Police Novels,” Arts & Letters, June 29, 2005] on police procedurals, and agree with everything written, but would like to point out a glaring omission from the list of top non-Americans: the Martin Beck series, by the Swedish husband and wife team of Maj Sjowall and Per Walloo. One a year between the mid-1960s and mid-1970s, and some of the best police procedurals ever written – in part because the hero is such a wonderfully melancholy character, and in part because of the authors’ explicit project of creating a running sociological critique of Sweden during a period of great upheaval. Most are available in paperback, and because of the sociological angle they should be read in the order they were written, beginning with Roseanna. One novel, The Laughing Policeman, was made into a movie starring Walter Matthau – set in San Francisco, it completely misses the power of the novel.

DAVID N. SCHWARTZ
Manhattan

‘Stop the Raid’

Re: “Stop the Raid,” Jack Kemp, Opinion, June 29, 2005. Unfortunately, Mr. Kemp is wrong. The DeMint-Ryan proposal that he heralds will not stop the “raid” on the Social Security’s annual surplus.

This would be the case only if the individual amounts of the surplus dedicated to each worker were in the form of a voucher that he would be allowed to immediately negotiate to buy a treasury bond from a private dealer or, say, a very safe mutual fund like TIAACREF. This would really take the current surpluses out of the hands of the politicians because they would not be able to get the funds by making additional “promises” to credit the so-called “trust fund.” They would be forced to borrow from the public, show a greater overall budget deficit and an increase in the public debt held by the public. Some of the future Social Security benefits of current workers would then be truly prefunded, meaning that the redemption would not depend on the future financial condition of our current pay-as-you-go system.

Immediate negotiability, which is key to creating real private accounts, cannot be allowable under DeMint-Ryan as now written. This is because DeMint-Ryan makes no provision for the increased federal debt that would be needed if the surplus were really being diverted to private accounts and non-Social Security spending was maintained. The treasury must still get away with promises, only to individuals rather than to the Social Security trust fund as a whole. Politicians still get to use the surpluses to fund non-Social Security programs without having to go the public and borrow. Workers must wait till they retire before their “treasury bonds” are redeemed. Funds to redeem the individual promises when the workers retire do not come from a now secure “lock box,” but from the additional tax payments and or debt that will be required to pay all the promised Social Security benefits after annual surpluses turn to deficits around 2015.

In effect, DeMint-Ryan does nothing to address the long-run solvency problem of Social Security, which reflects the fact that it is a pay-as-you-go rather than a pre-funded system. The only way to really solve the Social Security problem is to get the government out of the business of promising specific benefit amounts that will be due far in the future when no one can know what the economy or the world situation will be like. The private market does not provide promises, but it does provide mechanisms to the individual worker to manage risk, while the current social security system does not. And in addition to better risk management, real private accounts will almost certainly yield greater average levels of retirement benefits and in a form that will be much more useful to the older worker than social secularist non-bequeathable annuity.

As Jack Kemp and others note, DeMint-Ryan does not require any increased funding to shift to private accounts. But this is because they are not really private accounts. Shifting to real private accounts means raising additional funds to pay traditional benefits during a transition period – as the saying goes, no pain, no gain.

For the sake of not muddying an already complex debate even further DeMint-Ryan should either modify their plan so that it really pre-funds individual workers with the remaining surpluses, or drop it altogether.

DAVID M. O’NEILL
Senior Economist The Center for Business and Govt.
Baruch College, CUNY
Manhattan

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