Tuesday, February 15, 2005


So, I'm reading Rep. Paul Ryan's discussion of his plan to "save" Social Security which involves private accounts. He made this assertion which I thought was pretty astonishing:

Evaluating legislation I introduced last year, the chief actuary of Social Security determined that large accounts would even erase Social Security's $10.4 trillion unfunded liability — what the program promises today's workers but cannot pay. To deal with the "transition costs" of diverting money into private accounts, we should make offsetting cuts in other government spending.

I thought, wow! He must have a really impressive plan if it actually does that. So, I took a look at the plan to see exactly how the rather meaningless $10.4 trillion "unfunded liability" gets erased.

He erases it by mandating transfers from the general fund whenever necessary.

Problem solved!

...to be clear, I don't think that funding trust fund shortfalls out of general revenues is a bad idea, but it's a way to "solve" the "problem" by acknowledging that it doesn't exist.