>Because demographics would mean that pay-as-you-go would be=20
>burdensome, it is partially pre-funded since 1983. The pre-funding
>is a sort of cushion to tide us over the baby-boom hump. Alas, it
>was not quite enough, and perhaps deliberately. One of the objections
>in the Greenspan Commission Report is that it left Social Security
>underfunded by .58% if I remember right. Just enough to exploit
>later. But I digress.=20
>
I think the whole idea of "prefunding" is what some of us are arguing against. The fact is, there can be no prefunding - however you account for it, the government will always be taxing one set of people to pay another. The "surplus" is a way of shifting revenues from the more-or-less progressive income tax to the regressive payroll tax. I agree with Alf Landon, in this case: the system should be explicitly pay-as-you-go. As Keynes (I think) said, an individual can save for retirement, a society cannot.
Jim Baird
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