PRESTOPUNDIT

DAVID BROOKS on Social Security reform. Quotable:

When the Social Security program was created, there were 42 workers for each retiree .. in 2030 there will be two.

And the WSJ. Quotable:

At present tax and benefit levels the increasing retiree-to-worker ratio will lead to a projected $11 trillion in unfunded liabilities

But I'm against this:

the obvious way to pay benefits in the meantime is to take some of the unacknowledged $11 trillion in long-term Social Security debt -- the benefits that politicians have promised -- and be honest about it by issuing Treasury bills.

I'm for facing reality -- this looks to me like re-arranging the chairs on the deck of the Titanic.

Just one reminder. The way to move goods from the present and into the future -- and make those goods grow in the process (call it a "trust fund" for future retirement) -- is through constant re-investment in capital goods. If this is done through dispersed private markets and constantly adjusting individual entrepreneurs you can end up with ever more valuable networks of goods. But borrowing by the goverment from investment markets for current consumption is the negation of this -- it is a burning of the mills for a nights worth of heat -- and an endless string of tomorrow's with no lumber, no cloth, and no bread.

Do "conservative" economists get this? Or do they only "sort of" get it?

UPDATE: The LA Times: "move along now, everything is fine, move along now, nothing to see here."

UPDATE II: Tom Maguire has more on Social Security and "trust funds". Posted by Greg Ransom