Un-Baking the Social Security Cake Part I

The whole discussion of Social Security reform is so fraught with danger that I hesitate to venture into this mine field of emotion and misinformation. Perhaps the better metaphor (betterphor?) is wading into a pool of quicksand, since there is no one argument in this discussion that would cause instant rhetorical death. Rather the entire process of debate seems to suck one in and cause the suffocation of rational discussion.

In order to prevent such an untimely death on this important issue, I hope to write a number of briefs on this issue in an effort to unravel and illuminate the issues involved.

Before we "un-bake" the Social Security Cake, I think the first important task is to understand what type of cake we're talking about.

Most people don't realize that the fundamental difference between the two sides in this debate has to do with flavor preference

To wit: Is Social Security a retirement program or a social service entitlement program?

If Social Security is an entitlement program, then the Democrats are well within the national ideological construct to oppose the President who wants to take a give-away program from Congress and put shackles on it by privatization. If you believe Social Security to be this type of program, your objective is to maximize the payouts to the largest numbers of your constituents while at the same time trying to find the deepest pockets to pick in order to raise that revenue.

But - and this is a tremendous "But":

If Social Security is supposed to be a governmentally sponsored retirement program based on the same principles and structures as most other private sector retirement programs, then

"... bust my buttons! Why didn't you say that in the first place? That's a horse of a different color!"

A financially sound retirement program is based on mathematics, not politics. One can determine with a high degree of accuracy how long any group of 10,000 Americans are likely to pay into a retirement program and how long after retirement, they will likely draw on the same pool of deposited and invested money.

The only financially responsible way to manage such a program is to define the end benefits once and then begin to collect funds from workers and invest them at the hightest possible rate of return.

So the question is Chocolate or Vanilla: Is Social Security a Government Entitlement program structured as a give-away? Or is it a financially sound retirement program that is actuarially based?

"Don't mind that man behind the curtain.........."

As George Bernard Shaw once said, "A government which robs Peter to pay Paul can always count on the political support of Paul."

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