>>>>Like it or not, the Cato Institute's plan does that. The buck stops with us, we pay the unfunded liabilities of SS with the surpluses, move out of government controlled pay-as-you go unfunded retirement and start funding our retirement and allow our innocent and helpless children a clean slate for their future prosperity.
But here is what CATO says:
>>>>Here is an example to demonstrate the analysis just given. Assume a Social Security system in the year of reform with $100 billion in revenues and $100 billion in benefit expenditures. Suppose the workers invested the $100 billion in revenues in a private system instead.
>>>>Now suppose that to obtain the funds to finance outstanding benefit obligations, the government cut spending on other programs by $100 billion. The result is $100 billion in increased savings, through the private system. Moreover, the $100 billion in reduced government spending involves forgone present consumption, by society as a whole and not just current workers, of $100 billion as well.
A magic $100 billion in savings? Sounds a lot like David Stockman's magic asterisk. No definition about where it is coming from. Indeed, it is unrelated to SS reform at all. What about that same $100 billion put towards the current SS? I don't think they considered that option.
I am not unalterably opposed to a CATO type plan. I just think they need to be a little more honest about what is involved, and not count on 'magic' savings to make their plan work. One of the reason our annual deficits are lots smaller than they used to be is that the Congress no longer allows those kinds of 'wishful thinking' assumptions when appropriations and taxes are considered.
And no consideration of how that $100 billion reduction in consumption will affect the economy. Or the instant creation of Trillions of dollars in the form of gov't bonds issued to SS recipients and those being 'recognized' for prior contributions. Remember that little thing called inflation? Don't think that the gov't's instant creation of money won't affect it.
