Brad DeLong's Semi-Daily Journal (2004)

My significant other was one of the social security experts who worked on this panel. The answer to your question is "idiot". The reason the panel didn't produce a report is exactly as you outlined. They were told that the only acceptable outcome was one which:

(1) Included private savings accounts
(2) Did not cut current promised benefits
(3) Did not raise taxes

Therefore, even a panel that was intentionally stacked with a bunch of "let's privatize social security" advocates, was unable to recommend he do so.

sz

sz—

You assume the product of the panel was ever intended to be relevant to the issue.

I think the answer to Brad's question is "liar"— on the grounds that Bush could not really care less about "reform" of the Social Security program. The available evidence only suggests that Bush cares about being seen to emit the correct speech-behaviors necessary to project a message that the electorate will approve. He seems bright enough to know that the panel could not possibly produce an acceptable report.

Here's the shorter version of what happened:

Panel (in unison): I can't taste the alcohol.
Bush: That's the plan, ladies. What you don't drink, I'm gonna pour on you.

Brad,

A true non-economist here, but I found a very interesting suggestion for shoring up SS in Bob Shiller's book THE NEW FINANCIAL ORDER.

In it, he proposes an elastic formula for determining current retirees' benefits which is dependent upon the aggregate wages of current employees. The plan is therefore self-correcting; a "shortage" of workers to provide the necessary funding is impossible, since that funding level, and therefore the benefits, are linked to the total current wage base.

I though it quite ingenious. Then again, no economist here. I was wondering what you thought, if you're familiar with it.

Idiot-logue

"Mr. President, four years ago you made Social Security reform a part of your platform and you supported the idea of private savings accounts. If you still support the idea of private savings accounts for younger workers, how will you make it work? Why haven't we heard anything about this for 36 months?"

Well, hell, one can dream.

Idiot and liar. Not necessarily in that order. He and his enablers lie about his idiocy. But he plays his idiocy to the hilt, miming his supporters' idiocy to curry votes, thus he's a liar.

It's a little like the debate about whether OBL is alive or dead. He is what he is when it's useful.

Also: evil. George W. Bush and Osama Bin Laden.
Al Qaeda and the Republican Party. The two individuals and the two organizations who hate our government and work in more or less parallel tracks to destroy it.

They must go.

Idiot and liar. Not necessarily in that order. He and his enablers lie about his idiocy. But he plays his idiocy to the hilt, miming his supporters' idiocy to curry votes, thus he's a liar.

It's a little like the debate about whether OBL is alive or dead. He is what he is when it's useful.

Also: evil. George W. Bush and Osama Bin Laden.
Al Qaeda and the Republican Party. The two individuals and the two organizations who hate our government and work in more or less parallel tracks to destroy it.

They must go.

"You cannot--not given current projections--"support" all three of (a) diverting Social Security revenue to young workers' private accounts, (b) maintaining benefits at their current levels, and (c) keeping payroll taxes from rising. One of the three must crack. "

You could do option (d) divert funds from the general revenue to social security. This would however interfere with the process throwing money in the direction of political gain.

It seems clear that both sides are simply about getting their team to win, they are both going to do whatever they believe is most consistent with that goal. Consistency, truth, and the good of man kind are not on the political agenda. Those that value these things get stomped on by the political process lead by those who focus solely on winning.

The mass voter simply do not have enough incentive to focus on the issues and so they fall prey to techniques of manipulation. But in todays world politics is increasingly ceding power to technology in its ability to shape the world. Marginal effort is much better spent advancing technology than political agendas.

But I repeat myself.

"But I repeat myself."

Who do you think you are Mark Twain?

Idiot liar. Lying idiot.

"Idiot or liar?"

False dilemma!

Deliberately obtuse?

Great, Rob. The first thing that would have to go is the Dept. of Defense, since the cost of the rest of the gov. doesn't amount to a hill of beans. Or, we could reneg on payments of interest on outstanding Treasury obligations (another big part of the budget).

Now if you are of a conservative bent, this course challenges both your patriotism and your worship of contracts. You may wish to reconsider this course of action.

“Great, Rob. The first thing that would have to go is the Dept. of Defense, since the cost of the rest of the gov. doesn't amount to a hill of beans..."

I have recently heard the DOD described as the largest centrally planed economy on the planet. It's possible there is some savings to be had there. The rest of government amounts to a little more than a hill of beans, unless you have in mind a few hundred billion worth of beans.

For what its worth I have run several scenarios balancing the budget, if you want to give it a try its quite fun and not really that hard... if you are actually willing to cut spending!
http://www.budgetsim.org/nbs/longbudget04.html

“Now if you are of a conservative bent, this course challenges both your patriotism and your worship of contracts. You may wish to reconsider this course of action.”

I do not consider myself to be conservative, more Extropian. Finally, I really do not think the solution will not be found in the political sphere, but in technology. A few more generations of mores law and things are going to really get cooking.

Both.

Rob says, 'I have recently heard the DOD described as the largest centrally planed economy on the planet. It's possible there is some savings to be had there.'

Rob says, 'But in todays world politics is increasingly ceding power to technology in its ability to shape the world. Marginal effort is much better spent advancing technology than political agendas.'

The first statement is almost certainly true, but cutting the DoD's budget in this day and age would be a task to tax the political skills of Lucifer. The second statement suggests that even if the Prince of Lies were on hand to advise us on how to go about it, the time would be better spent elsewhere.

I conclude that Rob believes we should all play video games until the problem goes away. ;)

Is there a Web site that talks about the effect of all this new money on the market? Venture capitalists are still saying that there is more money available than good opportunities. What happens if still more money comes in? Do prices rise without any increase in "value"?

Historically it seems that about 40% of the return in the market comes from dividends, 60% from capital gains, i.e. somebody willing to buy the stock from you for more than you paid for it. He does so because he is confident that he can sell it for more than he paid you. But if there are not enough people to pay the payroll taxes, will there be enough to buy the stocks from you when you start to tap your 401K?

It has always seemed to me that the "fix" for Social Security is quite simple, though hard to transition to. Of course, the fix relies on the assumption that the purpose of Social Security is to provide the individual with some forced minimum level of savings for retirement/ disability because he/she will not do so on his/her own.

The "fix": make it a defined contribution plan rather than a defined benefit plan. Each individual would have a Social Security account which includes all of his/her contributions (incl. the individuals contributions which are called "employer" contributions), plus interest compounded annually at the US' avg cost of funds rate (or, possibly, the savings bond rate, the long-bond rate; pick one). Upon retirement/disability, the individual has a set of distribution options to choose from, based life expectancy and current interest rates. Probably have to recalculate every year.

I do not think there should be any "private" accounts, i.e., no Social Security invested in the markets.

The transition: the tough part. Modelling the population, determine the optimal age-break (possibly in the early 50s, I'm guessing) where those younger would be converted to defined contribution; those older, maintain the current defined benefit. For the transition period (10-20 years - some long period to reduce the "welfare" deduction), a portion of the younger group's contribution would have to be taken as a "welfare" deduction to provide funding for the benefits for the older group.

There probably will either need to be some sort of outside funding (taxes) or reduction in benefits for those remaining under the defined benefit plan. The modelling will help to guage the optimal age-point for the lowest needed external inflow.

Any thoughts?

It has always seemed to me that the "fix" for Social Security is quite simple, though hard to transition to. Of course, the fix relies on the assumption that the purpose of Social Security is to provide the individual with some forced minimum level of savings for retirement/ disability because he/she will not do so on his/her own.

The "fix": make it a defined contribution plan rather than a defined benefit plan. Each individual would have a Social Security account which includes all of his/her contributions (incl. the individuals contributions which are called "employer" contributions), plus interest compounded annually at the US' avg cost of funds rate (or, possibly, the savings bond rate, the long-bond rate; pick one). Upon retirement/disability, the individual has a set of distribution options to choose from, based life expectancy and current interest rates. Probably have to recalculate every year.

I do not think there should be any "private" accounts, i.e., no Social Security invested in the markets.

The transition: the tough part. Modelling the population, determine the optimal age-break (possibly in the early 50s, I'm guessing) where those younger would be converted to defined contribution; those older, maintain the current defined benefit. For the transition period (10-20 years - some long period to reduce the "welfare" deduction), a portion of the younger group's contribution would have to be taken as a "welfare" deduction to provide funding for the benefits for the older group.

There probably will either need to be some sort of outside funding (taxes) or reduction in benefits for those remaining under the defined benefit plan. The modelling will help to guage the optimal age-point for the lowest needed external inflow.

Any thoughts?

It has always seemed to me that the "fix" for Social Security is quite simple, though hard to transition to. Of course, the fix relies on the assumption that the purpose of Social Security is to provide the individual with some forced minimum level of savings for retirement/ disability because he/she will not do so on his/her own.

The "fix": make it a defined contribution plan rather than a defined benefit plan. Each individual would have a Social Security account which includes all of his/her contributions (incl. the individuals contributions which are called "employer" contributions), plus interest compounded annually at the US' avg cost of funds rate (or, possibly, the savings bond rate, the long-bond rate; pick one). Upon retirement/disability, the individual has a set of distribution options to choose from, based life expectancy and current interest rates. Probably have to recalculate every year.

I do not think there should be any "private" accounts, i.e., no Social Security invested in the markets.

The transition: the tough part. Modelling the population, determine the optimal age-break (possibly in the early 50s, I'm guessing) where those younger would be converted to defined contribution; those older, maintain the current defined benefit. For the transition period (10-20 years - some long period to reduce the "welfare" deduction), a portion of the younger group's contribution would have to be taken as a "welfare" deduction to provide funding for the benefits for the older group.

There probably will either need to be some sort of outside funding (taxes) or reduction in benefits for those remaining under the defined benefit plan. The modelling will help to guage the optimal age-point for the lowest needed external inflow.

Any thoughts?

It has always seemed to me that the "fix" for Social Security is quite simple, though hard to transition to. Of course, the fix relies on the assumption that the purpose of Social Security is to provide the individual with some forced minimum level of savings for retirement/ disability because he/she will not do so on his/her own.

The "fix": make it a defined contribution plan rather than a defined benefit plan. Each individual would have a Social Security account which includes all of his/her contributions (incl. the individuals contributions which are called "employer" contributions), plus interest compounded annually at the US' avg cost of funds rate (or, possibly, the savings bond rate, the long-bond rate; pick one). Upon retirement/disability, the individual has a set of distribution options to choose from, based life expectancy and current interest rates. Probably have to recalculate every year.

I do not think there should be any "private" accounts, i.e., no Social Security invested in the markets.

The transition: the tough part. Modelling the population, determine the optimal age-break (possibly in the early 50s, I'm guessing) where those younger would be converted to defined contribution; those older, maintain the current defined benefit. For the transition period (10-20 years - some long period to reduce the "welfare" deduction), a portion of the younger group's contribution would have to be taken as a "welfare" deduction to provide funding for the benefits for the older group.

There probably will either need to be some sort of outside funding (taxes) or reduction in benefits for those remaining under the defined benefit plan. The modelling will help to guage the optimal age-point for the lowest needed external inflow.

Any thoughts?

WSJ gets it wrong: "But Mr. Graham has been willing to address the $1 trillion transition costs, whereas Mr. Bush has not. Mr. Graham would raise the amount of wages subject to payroll taxes to cover costs." Don't know where they got that. Graham plan (as scored by SSA - see http://www.ssa.gov/OACT/solvency/LGraham_20031118/TableA.html) - would not raise taxes. It would simply cut defined benefits and make transfers from HI and the general fund. Where would the general fund money come from? "Cuts in corporate welfare," of course!

For all of the Bush bashing on this site, it doesn't seem like the Democrats have any better answers. The system clearly cannot last in its current form. The longer it goes without being fixed, the harder it gets.

I have at least 40 years left before I am able to claim SSN and that is assuming that part of the fix is not pushing the retirement age back. I really don't think I will ever see a dime from the program, and frankly it pisses me off that the government takes money from me everyday to pay for people who already had an entire lifetime to work and save for their future. Plus I am paying off stagering amounts of student loans (something current retirees never had to deal with) and I am forced to pay absurd amounts of money for housing because in the state I live there are old home owners who fight against all proposed new development (which drives up the price of the existing housing). And now I am being asked to pay for their prescription drugs as well. When is enough enough? When do we tell the AARP to "shove it"? When will the government stop taking away individual responsibility? When will we tell people that either they plan ahead and save or they suffer the consequences later in life?

So let's hear what John Kerry is going to do to solve the SSN problem and the Medicare problem. They aren't going away and saying Bush's solutions won't work is unfair when you don't have solutions that will work either.

The tale of SZ's significant other sounds suspiciously and sadly like stories heard from EPA.

Social Security is really a Ponzi scheme where the early "investors" reap the rewards while the later ones are left holding the bag, as wtf points out. What makes it worse is that the Federal Govmint has been skimming "surpluses" off the top for almost 70 years. It is also interesting to note that in 1935 the average age of death in the US was 65. The age at which, (coincidentally?) it was decided, social security benefits would kick in. This should tell you something about the thinking behind the plan. If SS had been created as an actual trust fund instead of a vehicle for fleecing taxpayers it would be solvent for the forseeable future and this would not even be a topic of discussion today. Honesty and fiscal responsibility by our lawmakers are prerequisites for any possible solution, though it seems a little late for them to be giving all that money back.

Social Security is really a Ponzi scheme where the early "investors" reap the rewards while the later ones are left holding the bag, as wtf points out. What makes it worse is that the Federal Govmint has been skimming "surpluses" off the top for almost 70 years. It is also interesting to note that in 1935 the average age of death in the US was 65. The age at which, (coincidentally?) it was decided, social security benefits would kick in. This should tell you something about the thinking behind the plan. If SS had been created as an actual trust fund instead of a vehicle for fleecing taxpayers it would be solvent for the forseeable future and this would not even be a topic of discussion today. Honesty and fiscal responsibility by our lawmakers are prerequisites for any possible solution, though it seems a little late for them to be giving all that money back.

Luskin declares victory for O'Lielly in his debate with Krugman:

http://www.nationalreview.com/nrof_luskin/kts200408090930.asp

The real problem is Krugman was too civil. When you're trying to debate someone who's shaking his finger in your face, insulting you, and shouting you down, the correct response in to mock him. Krugman just isn't used to dealing with thugs of O'Reilly's caliber. He let O'Reilly intimidate him cheap bullying tactics.

To Dick Cheney with civility when dealing with Rethuglicans like these. Krugman should have been trying to provoke O'Lielly into taking a swing at him on national television.

We won't talk about Luskin's forecasting record. Before the market tanked recently, Luskin was recommended investing in a double leveraged index of the NASDAQ. If you had listen to Luskin, you would have lost your shirt.

Social Security is really a Ponzi scheme where the early "investors" reap the rewards while the later ones are left holding the bag, as wtf points out. What makes it worse is that the Federal Govmint has been skimming "surpluses" off the top for almost 70 years. It is also interesting to note that in 1935 the average age of death in the US was 65. The age at which, (coincidentally?) it was decided, social security benefits would kick in. This should tell you something about the thinking behind the plan. If SS had been created as an actual trust fund instead of a vehicle for fleecing taxpayers it would be solvent for the forseeable future and this would not even be a topic of discussion today. Honesty and fiscal responsibility by our lawmakers are prerequisites for any possible solution, though it seems a little late for them to be giving all that money back.

Sorry for the multiple posts, kept getting "Page not found" msg.

Since the govmint has been skimming off the top like corporations, the corporate answer is the answer.

Just say oops, I know we promised you paid healthcare in retirement fot the last 30 years but we are only making 8 billion a year profit so poof you are on you own. (IBM among others)

Just say oops, I know we promised you a defined benefit pension, and accordingly reduced your salary to pay for that benefit, but now accounting rules allow us to transfer that money to our pockets so YOU LOSE. (IBM among others on the sage advice of the Watson Wyatts of the world. See Lou Gerstner's net worth)

Or they could just do like United, US Air or soon to be Delta, file bankruptcy and just walk away.

Sounds like plan the Chamber could support.

"The real problem is Krugman was too civil."

The real problem for America is that it has mass media that give life to such monsters as O'Rielly. I mean in every country there are idiotic-fascist-verbal-abusers plenty, but few are the advanced democracies where they not only get a voice but also intellectual notoriety. Seriously, he is part of a cancer that scaries me no less than France's Front National and clearly more than Berlusconi's coalition (!)...

"When you're trying to debate someone who's shaking his finger in your face, insulting you, and shouting you down, the correct response..."

O'Reilly knows his arguments are bull***t. His behavior follows as a result.

"I have recently heard the DOD described as the largest centrally planed economy on the planet. It's possible there is some savings to be had there. The rest of government amounts to a little more than a hill of beans, unless you have in mind a few hundred billion worth of beans."

A good argument for John McCain as SecDef, regardless of the administration. Desire and will to cut the porking, and the Defense street cred to get away with it. Of course, there's that pesky Congress...

They want people to have their own private accounts?

I didn't kow that was illegal NOW!

"Social Security is really a Ponzi scheme where the early "investors" reap the rewards while the later ones are left holding the bag"

But isn't that what the capital-gains part of the stock market is? For the market to go up forever, you have to have an unlimited supply of buyers.

Brad DeLong writes, "You cannot--not given current projections--'support' all three of (a) diverting Social Security revenue to young workers' private accounts, (b) maintaining benefits at their current levels, and (c) keeping payroll taxes from rising."

Sure you can. The government can borrow the money to pay the current retirees.

*You* know, if you're not an idiot or dishonest (and I know you're not an idiot!) that the government will be borrowing money anyway when, circa 2018, the amount being paid out from Social Security exceeds the amount coming in. Either they'll be borrowing money, or raising taxes, or reducing benefits. They cannot possibly avoid doing one of those three things.

Arnold Kling has addressed this issue very well:

http://www.techcentralstation.com/012104H.html

Or do you disagree with something he wrote?

Well, the rightwingers really face a fine dilemna here. If they were ever successful in their version of "saving" SS, where would they find the money to 'balance' the budget? In fact, if they ever raise public awareness to the point where people start to wonder how a program with several trillion in savings can be in trouble, how will they continue with their thieving ways?

Whether SS can be saved is a different matter. To do that we need someone with the moral backbone to say "These funds can be wisely invested in good infrastructure, but we can't simply let the funds be stolen to finance boondoggles like starwars, our need to rule the world, or tax cuts for the obscenely wealthy top 1% of our population."

Maybe the majority of the American people would support this program, but it's been quite a while since they were in charge.

Maybe the real model for the U.S. is the old Hapsburg Empire, which was probably functionally dead by 1870, but survived long enough on paper to start World War I. Maybe we're dead already, we just ain't laid down yet.

I'm not sure which panel the first poster referred to (the one Moynihan was on?) but I do know that at least one of those panels or commissions on Social Security was forbidden to consider the effects of any proposed changes on the survivor and disability aspects of the Social Security program. In addition, as one poster pointed out--what's been stopping people from having separate "private" savings plans for retirement anyway? If you look at how the Social Security program describes itself--you'll find that it was never intended to be the sole source of retirement income. Instead, it's supposed to be "one leg" of a "three-legged stool" with private savings and a private retirement pension the other two "legs." Is it the fault of those who set up the program that some Americans find it impossible (for whatever reason) to save for retirement and that, increasingly, corporations are finding ways to rid themselves of their pension obligations? Or scam their own employees along with shareholders a la Enron? Given the stock market losses of the past 3 years and the scandals plaguing the mutual fund industry (along with some poor fund managers) it's hard to see how "private" accounts would solve the problem of paying for people's retirement. But a series of articles I've read, which go on and on about how aging populations just sap economies doesn't appeal much either. They seem to imply (as does one post) that really, we should just put to death any person over a certain age who doesn't possess a given amount of wealth. And given that Social Security also pays disability and survivors benefits(survivors or former dependents of a deceased wage earner who died fully insured) I guess you're looking at killing those people too unless the deceased/disabled wage earner saved enough to support his/her dependents in case he died. Right now, SSI (Supplmental Security Income) which pays a maximum benefit of $564/month (in states which do not supplement the benefit)picks up the tab for people who either: (1) did not earn enough for long enough to be "fully insured" at retirement or whose retirement benefit is below that amount and there is no other income or (2) are not "fully and currently" insured when he/she becomes disabled (there are no dependents' benefits under SSI) and do not have other 'countable' income or resources sufficient to make them ineligible. I believe SSI funds come from the general fund, not the Social Security trust fund. What I understand Bush, et al to be saying is that those people should be left to die. Because that is what would happen to a fair %--how do I know? Because that IS what happened--during the Reagan administration when he, or his SSA Commissioner decided that there were people receiving SSI/SSDI benefit who shouldn't be and terminated the benefits of those people. Many of them also lost their health care coverage (including medication) and their housing (became ineligible for any kind of housing assistance). So some people died--exposure, lack of medical care, and some probably died from despair. Subsequently a majority of the federal circuit courts decided that SSA could not simply terminate the benefits--if a recipient appealed the termination within a certain period of time (usually 10 days at present) benefits would continue through up to the hearing decisional level. Given that it can take up to 2 years for a case to reach the hearing level (andin some parts of the country it probably took 2 years during the Reagan years), the federal court decisions clearly made the difference between life and death for some disabled people.
Some probably committed suicide, just as some people in Oregon with mental disorders committed suicide when their health care benefits, etc., were cut off and they could no longer afford their medications.

I don't like the idea of killing non-wealthy elderly and/or disabled people, either by neglect or intentionally. I have represented people who have been denied disability benefits and many of them have worked for years and because of a injury or accident are no longer able to work, even if the person wants to. Quite a few run through their savings, their retirement plans, and lose their homes while appealing denial of benefits--sometimes because of huge medical bills for treatment that doesn't restore their ability to work. Even those who have short or long term disability plans through their former employment are not able to make ends meet--often because of uncovered medical expenses. That can be true even if the disabled person is married (and isn't divorced by the healthy spouse who can no longer deal with living with a spouse who cannot work and/or is in constant pain) and the spouse works. There are also people whose mental disorders are so severe that they struggle unsuccessfully most of their lives to work--and there is either no medication that helps much or because of lack of access to mental health care, they'll never get the right meds prescribed. Assuming they could afford to take them or could get it together enough (or find someone to help them) to see if the drug manufacturers have a low cost/free program for those particular meds. As flawed as it is, the current Social Security disability program enables some disabled people to survive and sometimes even work part-time. Occasionally return to work full time and get off of benefits altogether. After doing this type of work for a number of years, my impression is that if there was universal health care coverage of reasonable quality, there would be fewer people receiving Social Security disability benefits--and more people paying into the system.

I think it's useful to be aware of the human cost of getting rid of or sharply reducing the current Social Security program. My impression, based on some of the statistics compiled by SSA (and they may or may not be more or less biased then any compiled by the Bushies), is that there are many elderly and disabled people in the US (particularly women) who would be in even worse shape then they are. Some of them would be dead-while the US gov't spends $150+ billion plus invading and occupying a nation because---let's see, first it was imminent use of WMDs, then it was to spread democracy and make US citizens safer (and I guess the rest of the world), who knows what they'll come up with next. Well, I guess if you're dead you're safe from "terrorists" or imaginary WMDs so perhaps it really is better to let people die and spend whatever money you "save" (by not "bailing out Social Security") on pointless and criminally stupid invasions of other nations. And installing untested global missile defense systems.

Perhaps that sounds like an emotional argument to economists, and perhaps it is. But what use is a nation-state if the only legal residents/citizens it deems worthwhile to assist and protect are those that are wealthy and/or corporate entities? Especially when those are the not the ones who are called upon to do the actual fighting and dying? Quite a few of the military and National Guard who went to Iraq are going to end up on VA disability and/or Social Security disability, be dependent upon VA medical care or Medicare/Medicaid for life or for several years. Is their reward for doing so being told, you know, you really should've set up a good private retirment and disability savings plans because really, you're not doing so and expecting other taxpayers to support you is an unjustifiable burden on the nation. But hey, thanks for your time and good luck out there in the job market!

John Wendt: "But if there are not enough people to pay the payroll taxes, will there be enough to buy the stocks from you when you start to tap your 401K?"

Excellent! To be blunt, both pay-as-you-go and fully-funded pension schemes boil down to the same thing: those who are working must allow those who are not to consume a certain fraction of the total production. If that fraction is 10%, then it makes no difference (at a particular point in time) whether the 10% is transferred directly (PAYG) or transferred through the mechanism of saving by the workers and dissaving by the non-workers (FF). If the workers choose not to save, the non-workers will not be able to sell enough assets.

At the macro level (ignoring issues like redistribution and social insurance), the only argument one could make for FF is that the higher savings rate would produce higher growth and a bigger pie to divide in the future. But we are stuck with a largely PAYG system today, and as almost everyone is aware, transitioning from one to the other will be expensive indeed.

"In fact, if they ever raise public awareness to the point where people start to wonder how a program with several trillion in savings can be in trouble,.."

The Social Security program has no "savings." Every penny of what comes in that doesn't get paid out to SS recipients is spent on other government programs. What Social Security has is a bunch of pieces of paper from another branch of the federal government that promises that the federal government will raise taxes, cut spending, or borrow money when Social Security payouts exceed pay-ins. In other words, the paper is worth the price of paper...less than a penny a sheet.

"Maybe the majority of the American people would support this program, but it's been quite a while since they were in charge."

The vast majority of the American people supported Social Security exactly as the vast majority of "investors" in any other Ponzi scheme supports the scheme, until it starts to collapse. People supported Social Security because they were getting something for nothing. As soon as a majority of voters are younger than the Baby Boom generation, Social Security will be so unpopular it won't be able to be maintained.