Social Security is a government-run Ponzi scheme. It depends on an ever-increasing number of workers to pay the retirement benefits of an ever-increasing number retirees. Like a Ponzi scheme, it works at first, but then the math starts to work against it. We'll reach that point in 2017 or thereabouts, when the amount of money coming into the system becomes insufficient to pay off promised benfits. The government will then start redeeming its bonds -- or IOUs -- and the federal budget quickly becomes a mess.
In order to maintain the solvency of the program, the goverment has three different levers it can adjust.
We now turn to Democrat presidential nominee Hillary Rodham Clinton.
Democrat Hillary Rodham Clinton promised retirees that if elected president she will not cut Social Security benefits, raise the retirement age or privatize the taxpayer-funded system.
The New York senator told the AARP's legislative conference that she would bring a "renewed national commitment to Social Security" to the White House.
"This is the most successful domestic program in the history of the United States," Clinton said to applause from seniors gathered in Washington to push their policy agenda. "When I'm president, privatization is off the table because it's not the answer to anything."
She also said she does not support cutting benefits or increasing the retirement age. Seniors can begin collecting partial benefits at age 62, with full benefits available at age 67 for those born in 1960 or later. Clinton said instead she will protect the program through fiscal responsibility and criticized President Bush's leadership on the issue.
Clinton mentions two of the three levers to maintaining Social Security: adjusting the retirement age and adjusting benefits. But those two are off the table as far as she's concerned. What's the remaining lever? Raising taxes.
If you're taking raising the retirement age and lowering benefits off the table and you still promise to be fiscally responsible, then you're raising taxes. No ifs, ands, or buts about it.
A couple notes on privatization or partial privatization or whatever you want to call it. First, if you're under the age of 50 and you're counting solely on Social Security for your retirement, you're a fool and should start practicing now for your retirement supplemental job: "Welcome to Wal-Mart."
Second, remember Clinton's admonition that "privatization is not the answer to anything" and then go and read this article about Tiger Woods' PGA retirement fund which could conceivably net him $1 billion in old age.
Oh, and because of the way Social Security works, he'll qualify for a Social Security check too.