Doing nothing about Social Security.

ITEM: The Des Moines Register maintains that Social Security should be left as it is. On December 21, the Register's editors commented: "The president who believed Americans would be welcomed with open arms in Baghdad now tells us that every American can retire rich. All we have to do to reap this bonanza is give up a lot of our future Social Security benefits."

The Register continued: "Pardon us if we're not ready to swallow every claim President Bush makes.... Just because his ideology tells him private savings accounts would be superior to Social Security for the average American doesn't make it so."

ITEM: Writing online for American Prospect magazine, staffer Matthew Yglesias said on December 21: "Until very recently, I believed, as most of my generation still does, that Social Security was facing a crisis. Thanks to a declining birthrate and increasing longevity, at some point during my lifetime the program was going to go bankrupt and people my age were going to wind up with nothing after a lifetime of payroll taxes. I was--and the bulk of young people still are--the victim of a massive fraud, perpetrated by Social Security abolition advocates...."

CORRECTION: Nobody would be forced to give up benefits in any of the Social Security reforms under serious consideration--which would allow a person to choose to pay a small portion of his payroll taxes into a personal savings account. In actuality, the most "massive fraud" involving Social Security is the pretense that there is a "trust fund": Social Security taxes paid in today are immediately used to pay current beneficiaries and to pay off government debt.

Left alone, by 2018, Social Security will be spending dollars faster than it receives them. Doing nothing will make matters worse. This isn't academic theory, but a matter of implacable demographics. When Social Security was adopted, there were about 42 workers paying the benefits of one retiree. Now, that proportion is down to three workers to one retiree; by 2030, the ratio will be two to one. A working couple can look forward to supporting themselves, their children, and a retiree.

Though many liberal Democrats today suggest that the status quo is just fine, that was not the case when New York Senator Daniel Moynihan and President Bill Clinton pressed for reform. Indeed, consider the comments of two former senators, neither a conservative, in the Washington Post for August 12, 2002. Said Democrat Bob Kerrey and Republican Warren Rudman:

   Suppose that a member of Congress
   introduced legislation called "the
   Social Security Do Nothing Act."
   Under this bill, promised retirement
   benefits would be cut by 16 percent
   for today's 30-year-olds, by 29 percent
   for today's 20-year-olds and by
   35 percent for today's newborns. Alternatively,
   payroll taxes would go up
   by roughly 40 percent in 2041. How
   many politicians would rush to endorse
   this bill? And yet these are the
   choices under the Do Nothing Plan.

Not only is the system unsustainable, it is also a particularly poor "investment." Social Security is now a guaranteed loser. The trustees of Social Security have calculated that taxpayers starting work have bleak financial outlooks. They can expect, reports Investor's Business Daily, "to earn a negative return--about -0.86% a year--on the money they put into Social Security. Compare that with the average 6.5% that the Social Security Administration thinks the stock market will generate annually for the next half-century."

Although 42 million Americans own 401(k) plans, and about 52 percent of households have investments in mutual funds, liberals contend that Americans are too stupid to be allowed to invest a small portion of their own retirement money.