You guys need to get out more - check out Econlog (Arnold Kling) to disabuse yourselves of the delusion that people who are opposed to privatization deny there's a problem.

We deny privatization is the solution and we deny the problem is as intractable, dire and immanent as Bush's economists say.

Deb

You should be telling this to Krugman. We made exactly that point in Report #169. The current system could be easily extended by tweaking the retirement age up and slowing the wage rate escalator down. It's Krugman who is opposing privatization by arguing that NOTHING needs to be done until 2042 at which point he would raise taxes on the 2 people in the labor force per every 1 retiree. This is insane!

KTS

The government bonds held by social security are just as real as any other government bonds. Say that my payroll taxes had not been raised in the 1980s to forward fund SS. Say that I used the money I saved from the lower payroll tax to buy myself some government bonds for my retirement. Would you then argue those government bonds were not real? of course not. Yet this is *exactly* what was done -- payroll taxes were raised and government bonds were purchased for me by the social security administration.

Now if you think the U.S. will have to default on its bonds in the future, that is another thing. If it is true, cutting SS benefits would address it. But so would cutting defense, raising taxes on the rich, or doing absolutely anything else that would address a fiscal crisis. SS has no special status.

John Weidner, just who is it operating the Ponzi scheme, you or Paul Krugman? First of all, I had no problem accessing www.bepress.com/ev, which you call a pay-site. Methinks you seek to discourage people from discovering the truth for themselves, or at least deter them from reading viewpoints different from your own. Beyond that, you are guilty of both deceit and shoddy research, for how can you implicitly state that you paid to read the article in question posted there (unless you never actually did even try)? From there, clicking on Paul Krugman's article, 'Confusion About Social Security', brings up the piece in PDF format without any requirement for payment or registration. And--imagine that!--as advertised, the article REALLY is a longer version expanding on the points made in his NY Times op-ed article, 'Stopping the Bum's Rush'. FYI--
From Berkeley Electronic Press FAQ:
"Why am I asked to sign up for an account and why would I want to do so?
Establishing a free account with The Berkeley Electronic Press has several benefits."
From bepress/ev (The Economist Voice) Aims and Scope:
"Articles are short, 600-2000 words, and intended to contain deeper analysis than is found on the Op-Ed page of the Wall Street Journal or New York Times, but to be of comparable general interest."

Secondly, you misrepresent Paul Krugman's stance on this issue, as he has stipulated that minor tweaks to Social Security may be necessary to retain solvency after 2052 (and the more likely scenario would be a slight reduction in benefits and/or eligibility, not an increase in SS taxes). However, as has been pointed out by other economists familiar with this issue, those tweaks would be no greater than previous adjustments made to Social Security in any of the past decades, nor is there any particular urgency in enacting such legislation.

Third, your graph, apparently obtained from the Social Security Administration, reinforces the central point Krugman and others, such as the SSA and the OMB have made: that Social Security is fully solvent for decades to come, without any changes whatsoever. Therefore, your alarmist Chicken Little claim of “crushing taxes that will be required around 2030” is erroneous and baseless. It should also be noted that the graph uses conservative estimates, below current and past levels, for economic growth. Nor does it take into account other possibilities, such as expanding immigration to compensate for flat or negative population growth in the U.S., which could not only increase the number of workers necessary to optimize or sustain economic growth, but also the tax base required for maintaining the present SS status-quo.

Finally, why do you call this "unfunded treasury debt"? Isn't it because, through the irresponsible tax cuts and deficit spending of this Republican administration and Congress, the Social Security Trust Fund, or "lockbox", has been raided and depleted? Basically, you are postulating that the U.S. government has no obligation to repay its own debts, which is simply ludicrous. I don't know which economic planet you are coming from, but it certainly isn't the real world. The day our federal government no longer honors its debts is the day our currency becomes worthless, in which case this whole Social Security "issue" becomes moot, anyway.

Bugs:

You are correct. We saw the subscription window and assumed erroneously that payment was required to read the article. In fact it can be opened. Since we got the article from another source (an on-line university library service)we did not pursue the matter at bepress.com. There was no intent to discourage further reading.

By the way, can you tell us what Krugman's longer version of the SS issue adds to the shorter version we quoted in our report?

KTS