republicans who do not support bush's social security reform.

Any article that buys into crisis rhetoric is either v. misinformed are blatently biased towards "reform".

more fun here

And so, at the exact moment that America contemplates replicating this disaster, many in Britain -- some conservatives included -- are looking more and more kindly on American Social Security as a model for reform. The National Association of Pension Funds, a group of employers who sponsor the nation’s largest schemes, is urging government not to expect the private sector to shoulder the burden of keeping the nation’s elderly from poverty. Chief executive Christine Farnish notes that it’s “actually cheaper for the state to carry the risk,” adding that in looking for a system that offers the best combination of modest guaranteed retirement bene?ts delivered at low cost, the U.S. Social Security program seems the best model. “It doesn’t have to make a pro?t, and it delivers ef?ciencies of scale that most companies would die for,” she says.

That last statement in particular is such a no-duh, but is so rarely raised to counter all the miracle-of-the-marketplace bullshit. It's the same basic case for universal health care: a nonprofit system with widely distributed risk is, if run half competently, a much less expensive and more efficient way of doing things than having many smaller for-profit systems that have a hard time balancing risk. The only problem, of course, is that no one can get rich off it -- which makes it unacceptable to the greedheads.

no overhaul of our system is required.

the supposed problem social security faces is caused by an historical anomaly - the post-war baby boom. the questions are whether the baby boom presents a problem and if so how to deal with it. the answer to the first is somewhere between possibly and probably - the problem may not present itself, but its probability is such that it's important to plan for in advance, perhaps but not necessarily as early as now, even if the real impact is more than three decades out. there are many answers to the second, but some are very simple and relatively pain-free across the board. adopt them, and the system will be fully operational throughout our lifetimes.

there is a basic sleight of hand occurring here. we do in fact face problems with our old-age health program, Medicare, that may well require an overhaul of the program. the administration is trying to rhetorically bootstrap an overhaul (an elmination, essentially) of social security onto an overhaul of Medicare by referring broadly to the 'crisis' supposedly presented by the two programs, the same way it referred to weapons of mass destruction in Iraq to make people think Saddam had long-range nuclear warheads when they knew he only had a few, aging short-range chemical shells, and the same way it referred to Saddam's support for terrorists to make people think he was going to give nukes to bin Laden when they knew he was just sending money to the mothers of dead Palestinian suicide bombers. You see, it's harder to call the big lie a big lie on the television chat shows when part of the lie is kinda sorta true.

as for the 'public-private model' stuff, we already have that. you want to invest in the stock market? no one's stopping you. you want to add private accounts to social security? fine. give back some of the tax cut. you're not going to add private accounts to social security by taking the money out of social security. that's like the government saying "give me a million dollars and i'll let you try to win it back at the slots. oh yes, and there's a charge to use the machine."

Over the next 75 years, the best estimate is that Bush's tax cuts will cost from $10 trillion to $12 trillion. The prescription drug bill will cost about $8 trillion. All this comes while bills mount for the global war against terrorism. In essence, we've voted ourselves more services and lower taxes and billed both to our children through a higher national debt that is soaring again after shrinking in the late 1990s.

The combined cost of the tax cut and prescription drug benefit is about five times larger than the projected gap between Social Security's revenue and its promised benefits over the next 75 years. Yet Washington has decided that the Social Security shortfall is the real crisis. So the administration is discussing changes that would sharply reduce guaranteed Social Security benefits for young workers while protecting benefits for those at or near retirement today.

According to the Treasury, Social Security's funding from FICA will not be enough to cover expenses beginning in 2009. We will then open up Al Gore's lockbox to pay for the system. Around 2018, the Gore lockbox will be dry and the system will have to be paid for by Treasury bonds and the interest on those bonds (which in turn are held by more bonds.) By 2041, all the bonds will have been redeemed--that'll cost the government $1 trillion that year (which will probably be 1-2% of GDP.)

Once the bonds are paid off in 2042, the crisis is (relatively) over for Social Security in terms of hamstringing the Treasury. At that point, FICA will be all that covers benefits, which means that benefits will be cut by more than 25%. That will be a crisis for a lot of people, instead of just a crisis for the government's general fund.

Racking the Treasury by redeeming bonds will certainly affect the economy and the government's financial position--there's no slight of hand going on in that particular area, and given the other problems (government deficit, Medicare, etc.) it's something that would make a recession extra painful in the coming decades. This isn't a crisis in terms of the system going dry, but it's a certainly a bad situation that needs to be addressed (again) given the other significant, unfunded ventures currently on the horizon (Medicare, most notably.)

These projections are based on somewhat pessimistic numbers of growth and productivity, but given the government's track record on projecting cost it seems quite prudent to assume that there will be a problem in four decades. But if we address it now--it would still take lots and lots of political capital for even slight adjustments to the current system--it should be fairly painless.