Explaining how both the "Social Security crisis" and the "privatization solution" rely on faulty math misses the point of the president's plan entirely. Like supply-side tax cuts, Social Security reform is a subject on which conservatives prize philosophy—or, if you prefer, ideology—over arithmetic.
The confusion over the nature of the debate is intentional. The Bush administration has linked two reforms—private accounts and benefit cuts—that have nothing to do with each other. Benefit cuts are the administration's preferred solution to Social Security's long-term financing imbalance. (Democrats prefer a mixture of benefit cuts and tax hikes.) Private accounts have nothing to do with Social Security's actuarial problems, except to the extent that they make them worse. White House aide Peter Wehner conceded as much in his leaked memo on Social Security. Pushing investment accounts without benefit cuts would mean "making no effort to address [the system's] fundamental structural problem," Wehner wrote.
Here's what a straightforward discussion of the philosophy behind the Social Security system would look like: Democrats support welfare for old people, on the grounds that it creates a safety net for capitalism's losers, who might otherwise live in poverty. Republicans oppose welfare for old people, on the grounds that it reduces incentives to work and save, it gives the government too much money to spend, and it makes people overly dependent on the government for their retirement. That's an honest debate. Let's have it.
There's a lot of good stuff between the quotes. Please go read.
Look, I know that Social Security needs some work. Fine. Let's fix it. I think we could start by not letting the government "borrow" the money to finance the budget. I'd like to see the amount in the "trust fund" that is composed of T-Bills, U.S. Savings Bonds, or all the other fancy names for I.O.U.'s. Their "promise to pay" is a house of cards, and there must be a tremendous interest bill. A tweak here, a tweak there, and that takes care of the math part.
Here's the true philosophical part as I see it: Do not let the Bush administration touch Social Security. They have fucked up everything they've put their hand to and there is no reason to believe they will do any better with this. I think their aim is twofold: Enrich their Wall St. henchmen, and make more greedy Republicans, and the Hell with the rest of us.