The mail.(Letter to the Editor)

In "Reform-Related Deficits Are Not to Be Feared" (March), John Makin suggests that we issue large amounts of federal debt in order to finance a transition from a "pay as you go" Social Security system to a "we-funded system." If the new reformed system is debt-financed, in what sense is it pre-funded? He says, in effect, that we'll be better off after we exchange an unfunded off-the-books liability for an unfunded on-the-books liability. Yet the liability is still there. The only cure for that is either more contributions or less benefits--an unpleasant reality he leaves unmentioned.

Many supporters of President Bush's personal ownership plan don't seem to much care if anyone saves for what is owned. This is unfortunate, because Americans are increasingly going into hock for everything. Our net national savings rate, now at an historic tow, ranks last among developed countries. Our net borrowing from abroad along with our net liabilities to other nations are at historic highs. Foreign holdings of U.S. Treasury debt (37 percent in 2003) are also at an historic high. None of this seems to bother Makin.

Peter Peterson

Co-Founder, The Blackstone Group

Naomi Riley's argument for merit pay for teachers does not stand up to scrutiny (SCAN, March). The only way to assess the validity of her claim is to design a rigorous study with experimental and control groups. The schools in each group need to be similar in terms of prior achievement, poverty level, demographics, and method of assignment.

Riley considers none of these factors in broadly concluding that merit pay results in higher educational quality than the traditional basis for paying teachers. Instead, she relies on testimonials and her own casual observation of Columbia University's school. To buttress her case, she then cites"a blue-ribbon commission" that recommended pay-for-performance for New York City public schools.

It's interesting to note the double standard in The American Enterprise: Editors are so exacting in their demands for evidence when supporters of public ...