In a January 14 column in USA Today, Stefani D. Carter, identified as a former fellow at the conservative Heritage Foundation and a current student at Harvard Law School and Harvard's Kennedy School of Government, made false claims to argue that Social Security faces an imminent threat and that private accounts are the solution.

First, Carter falsely claimed that Social Security “will be forced to cut benefits or increase taxes” in 2018:

In about 13 years, Social Security will begin to pay out more in benefits than it receives in taxes. At that point, the program will be forced to cut benefits or increase taxes, either of which will negatively affect minorities and the poor. By 2032, only a few years before I retire, Social Security will be taking in only enough money to pay 70% of promised benefits.

In fact, the Social Security trustees estimate that under current law the trust fund has enough money to pay promised benefits until the year 2042 -- not in 2018, as Carter claimed -- while the nonpartisan Congressional Budget Office estimates that the so-called “year of exhaustion” will be 2052.

According to the trustees, in 2018 the Social Security trust fund will begin to pay out more in benefits than it receives in taxes, and in 2032, yearly revenues will equal 70 percent of costs. But current law ensures that long-term assets, in the form of U.S. Treasury bonds, will cover these expected yearly shortfalls. The trust fund has been accumulating these bonds for decades and will continue to accumulate them until 2018; during this accumulation period, the system has collected billions more in taxes each year than it pays out in benefits.

Next, Carter misleadingly claimed that Social Security is unfair to poor and minority workers, citing the example of a beloved uncle who died before the retirement age and therefore, according to Carter, “didn't get a dime back”:

Minorities get the least because they generally have a lower average life expectancy than whites (age 72 for blacks vs. 78 for whites). They are being cheated out of years of payout. The poor are hurt disproportionately, too. Lower-income Americans also have a shorter life expectancy than the well-off, meaning a smaller overall payout.

But while whites do have a higher life expectancy than blacks, the difference between the two expectancies is largely due to higher mortality rates among infants and the young. Infants pay nothing into the Social Security system, and youths who die in their teens or 20s pay a relatively small amount. According to the report Health, United States, 2004 , compiled by the Centers for Disease Control's National Center for Health Statistics, the difference in life expectancy for blacks and whites who survive until 65 is about two years (depending on birth cohort).

In claiming that Social Security was unfair to her uncle, Carter also ignored a substantial element of the Social Security program: survivor and disability benefits. If her uncle, who died when he was 58, had become disabled, he would have received disability benefits from Social Security. In addition, his wife and children, if he had them, would have been entitled to Social Security survivor benefits.

Finally, Carter criticized the current Social Security system as inefficient, writing: “The program, as it stands, is an inefficient way to save for retirement: It has a decreasing rate of return.” Many economists believe, however, that President Bush's proposed private investment accounts will vastly increase retirees' exposure to risk without producing a better rate of return than the current system. Brookings Institution senior fellow Peter R. Orszag, former special assistant to the president for economic policy (1997-98), reviewed estimates by three other economists -- including one who openly favors creating individual accounts -- and all three indicated that private accounts will typically provide a rate of return similar to that provided under the current system.

Vincenzo Galasso, a researcher at the Centre for Economic and Policy Research, argued in a paper published in the September 2002 Social Security Bulletin that the rate of return would be higher in the current system than for private accounts. He wrote: “Calculations of the median voter's return from ”investing" in Social Security suggest that for a majority of voters the U.S. Social Security system provides higher ex-post, or actual, returns than alternative assets."