"A government which robs Peter to pay Paul can always depend upon the support of Paul."
George Bernard Shaw

I'll flat-out admit that I wish I could avoid talking about Social Security, because it's such a hot-button subject and tends to polarize what could perhaps be rational thought. Most political aspirants avoid the topic, save to say that they are for it. We are all for it, but have done precious little to preserve or protect it.

I don't pretend a solution, it's too complicated for an easy answer, but that complexity has held us back from debate for too many decades. Those who have the forum to suggest, in succeeding administrations, have been too willing to postpone that responsibility in the knowledge that SS won't fail during their administration.

When SS was enacted over fifty years ago, there were nearly 160 persons working and paying into the system for every recipient. That number eroded in the first decade to sixteen-to-one and has further declined to three-to-one at the present time, an insupportable relationship of inequity between those paying and those paid.

The fact is, the system's headed for the wall and no one is willing to face up to it. Just so long as it doesn't happen during their term, Washington can be depended upon to hide its head. And yet there's time, if they want to do something, but not a whole lot of time. Congress should have faced a growing imbalance twenty years ago, when the bottom was falling out of the worker base. Instead, they increased contribution rates, requiring working citizens and their employers to shoulder a skyrocketing burden.

The first part of my suggestion is to face up to what's wrong with the present system. We pay retirees from current income. The guy who draws a check gets his money immediately from what is withheld from you now. In order to work properly, that requires a large work force and a small retired group, which we had at the inception of SS. But America's getting older and there's a smaller and smaller number of people working to support a larger and larger group of retirees. You'll probably get yours if you're nearing fifty and I'll probably get mine, but we need to properly fund the system on an endowment basis, allowing the energy of compound interest to multiply SS taxes over a lifetime of contribution.

A system where your money, the money you put into the system over the years and the money your employer puts in on your behalf will be earmarked for your retirement and no one else's.

What turns small amounts of money into large amounts of money is time and compounded interest on that money over time. Compounded interest over time is how ten dollars turns into a hundred dollars, even at low interest rates, particularly when that time is measured measured in the forty years or so of a working life. If the money you'd put into the system had been working as long as you have, there'd be a very substantial income for you at sixty-five, instead of the bare subsistence of Social Security.

It wasn't done that way in the first place because it was enacted as an immediate benefit and the worker-retiree ratio seemed to make sense in the days before computers could accurately model unlimited future scenarios. In large part for political considerations, all retirement-age citizens got it immediately after the legislation was passed and it was funded with current withholding and left that way, never adjusted. That's why the tax rate and the base salary upon which the rate is figured has kept going up, because it was never the right time to fix it. Succeeding congresses knew it wouldn't fail during their term in office. Now the younger congressmen and senators see their own benefits at risk and are hearing from a growing constituency of young voters, who are unwilling to be left holding the bag.

Improving the system evokes a good deal of fear and finger-pointing today, the right time was twenty years ago, but this is probably the last chance we've got. Even so, if Congress were to endorse an endowment-based system, how will they pay the people on Social Security now? More to the point, how will they pay you and me? That's always been a sticking point and primarily why nothing's ever been done, that and the fact it's largely encouraged in Washington to shrug off increasing debt.

In 1993, when a scandal broke over unfunded corporate liabilities to private pension funds approaching 50 billion dollars, the federal government screamed and a catch-up began to follow. Yet the unfunded liability of SS amounts to 12 trillion dollars, 2,400 times as great a debt and little is heard, nothing done. Our children and their children are relied upon to fill that gap.

I agree that we can't suddenly change SS to an endowment based system, because that will provide no funds for current retirees. So that's out and it can't be left the way it is or there'll be nothing remaining for the current contributors who are supporting us. So that's out too.

What we can do is wean the country off the cash system over a period of time, say twenty years. It'll be tough and it'll cause periodic shortfalls, but it's possible and seems to me to be the only reasonable direction.

Right now and at this very moment, due to its huge contribution rate, Social Security is producing a surplus. The congress, in their short-termed wisdom is making no strategic use of those funds. While that surplus exists, we have the opportunity to wean ourselves at say five percent a year to an endowment-based system.

In twenty years, or whatever period of time is negotiated, we will find ourselves one hundred percent endowment-based and out of the woods, future generations secure. In the meantime, we would have to patch together a hybrid retirement program, some part of the money from current cash and a slowly increasing balance endowment-based. In any event, the necessary course is to begin the journey away from current-contribution retirement benefits. Not exactly a picnic, but possible to accomplish.

On the plus side, there are some really important side benefits, if you don't consider getting the system standing on its own feet benefit enough.

Social Security as it now exists doesn't produce anything except a growing liability, one that will get so huge it finally tips over. An endowment-based system will produce an enormous capital base in actual saved money, money in government securities or other guaranteed investments that will be available for use, just as your money in the bank is available. Money to fund capital needs, such as factories and homes, money that we don't have to borrow from foreign investors.

America is the most savings poor of all developed countries. An endowment-based Social Security system will go a long way to cure that irrational circumstance. It will make secure your retirement and mine . . . more importantly, make secure the retirement futures of our children and grandchildren.

Additionally, there's the cost of what we're doing now, the incredible cost. At upper earning levels, contributors kick in over two hundred a month towards Social Security and their employer matches that. That number is rapidly increasing with no end in sight. In the case of the self-employed, they pay both ends, a doubling of contribution that buys a benefit at retirement of maybe a thousand a month.

Over four hundred a month to buy a thousand. You wouldn't go near an insurance policy like that with a dozen ten foot poles. You'd laugh your way out of the agent's office and yet we benignly accept it, like there's no choice.

There is a choice and over a lifetime of work, even at a measly three percent return, you will be able to secure an increased benefit for a hell of a lot less all by yourself. Or share it with your employer for half of a hell of a lot less.

Social Security absolutely must remain inviolable. There is talk of increasing the retirement age as well as further taxing benefits or creating a cut-off for any benefit at all to those who can support themselves. In my view, these so-called "solutions" are unconscionable in a society where all have made a contribution. Beyond that and having said that, SS must also become more useful and supportive to society. Presently, nearly forty percent of recipients are held away from poverty levels only by their SS payments.

The claim that Social Security was never intended to be a sole retirement source carries an element of truth. It was however, meant to substantially contribute to retirees security in combination with whatever pension and/or private savings they had. For many it remains a sole source. Properly endowment-based, it could far better support that need, allowing the forces of compounded interest to work in favor of, rather than against the system.

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