Dirty Little Lies

Herman Cain's latest article is called Dirty Little Secrets. Here are some sections from it.

First, Democrats want President Bush's proposed personal retirement accounts off the negotiation table because Congress has already spent your money. That is because, in reality, there is no Social Security Trust Fund.

The Trust Fund is merely an accounting maneuver by which the government replaces your payroll taxes with IOUs to be redeemed at a later date.

This is a lie, as you all know. The Social Security Trust fund is invested in Government Treasuries.

The second dirty little secret is that personal retirement accounts do not really constitute privatization. Privatization means someone else owns your account. Bush's Social Security plan provides younger workers their own accounts that they control, not the government.

This is at best a half truth. The Bush Administration has suggested that with the money in your accounts you will be required to invest in an annuity upon retirement. Any excess money is yours to spend or give to your heirs, but the Annuity (which will be a big chunk of your account, anyway you look at it) will be non-transferable.

The third dirty little secret concerns the personal retirement add-on accounts some Democrats have hinted may bring them to the negotiation table. These add-on accounts would be available to workers on a voluntary basis, but do nothing to solve the solvency crisis or put workers in charge of their own money.

Another dirty little deception. The truth is that the President's accounts do nothing to solve the solvency problem either, as anybody with a basic understand of math could understand.

One new wrinkle, Mr. Cain prefers the word Long Term Solvency to permanent solution, but the effect seems much the same.

Obviously, long-term solvency of the Social Security system is not the Democrats' true long-term goal. Solvency cannot be achieved by reducing benefits, increasing taxes, and increasing government spending.

Technically this may be true. There is nothing the Democrats can do right now to ensure that Social Security remains permanently solvent. It's possible that small corrections right now could fix the problem for a quite a long time. Lifting the Payroll Cap for example. But will that really fix the problem forever? Can a problem like Social Security be solved on a long-term basis (Depending on what long term means. Removing the Social Security Cap fixes the problem for the next 75 years according to recent study by the Social Security Office. Is that long term enough?

Not if your real goal is to see Social Security as a program eliminated.