Reinventing Social Security

After reading the front page story in today’s Times about Social Security, The Gotham Gal asked me the question I’ve been wondering about as well.

When all the retirees blow up their "personal investment accounts" investing in speculative situations, who is going to bail them out?

I am no fan of our current social security system.  My social security payroll taxes are going to fund the current retiree’s benefits, not my future benefits.  This is a huge ponzi scheme that is going to blow up at some point when there are more retirees to carry than current workers can support.

So reforming this system makes sense.  And making it a "pay for your own benefits" system is a worthy cause.  But allowing participants to manage their own account doesn’t seem to make sense to me.  I hope they come to their senses about that.

As for the "huge borrowing" referred to in the Times article that will be required to transform the system, it seems to me that this is the money that will be required to finance all the benefits that aren’t going to be funded with the ponzi scheme anymore.  It’s an unwinding of the ridiculous way we’ve financed social security for the past 70 years.

I am all for taking our medicine and recognizing the huge liability that we’ve been taking on.  If it requires "huge borrowing", so be it.  We’ve borrowed the money one way or another, so putting it on the books seems like the wise thing to do.