This presents a double blow to privatizers. First their strongest argument has been that doing nothing is not an option. Well from where I am standing it is a very fine option. Second they argue that stocks perform better than bonds in the long run. Well maybe, but now they need to present a business case. One that reveals their own predictions for productivity. Because any numbers above 1.9% in the out years means Social Security is overfunded.

The Social Security narrative has been the same for years: it is headed for a crash and taxpayers will have to bail it out. This has allowed opponents to treat it like it was a charity and they the benevolent dolers out of tough love. Well this turns that on its head. If Social Security is actually solvent over the long run we have a situation where zero dollars derived from investment have ever or will ever be needed. Social Security can hold its head tall and say "Hey Mr. Rich Guy, it's not your money, it never was, it never will be". And "BTW as of Dec 31, 2003 you owed me $1.5 trillion, ya deadbeat". (2004 report p.4)

Having this widely recognized should be enough to head off privatizers but it may not be enough. But we have a secret weapon in case it doesn't. Bush has to make a case for privatization to people who pay nothing now (the investment class) and to people who only pay it on a fraction of their salary (baseball players, movie stars and trial lawyers come to mind). Privatization may make stockbrokers hearts go pitter-pat, but Warren Buffet and Roger Clemens and Mel Gibson may be reluctant to reach into their wallets to fund a privatization transition for a program that doesn't benefit them in the first place. And which is not broken in the second place.

Now the politics. These numbers are not secret, if nothing else I have been spreading them for years. So why hasn't the Democratic Party simply cried "Bullshit, it ain't broke, keep your hands off". Simple, the Social Security "Crisis" has been useful for both parties. Clinton used it to stave off Republican tax cuts: "Save Social Security First". A solvent Trust Fund undercuts the whole defence. And of course Bush is using the "Crisis" to argue for privatization and to argue that we can't possibly afford such things as National Health Insurance. Those Boomers will be retiring after all, and we have to bail them out. Well no you don't. We self-funded our own retirement thank you.

But it is time for Democrats to get their heads out of the sands (or darker places) and shine a bright light on this attempt to skim billions off the payroll tax for the benefit of Wall Street to "fix" something that is not broken.

And for one last eye-popping table. Let's say we beat those fairly anemic numbers at the beginning of the post. What kind of balance are we talking about in future years in 2004 dollars? Check out the Low Cost numbers in this table and keep in mind that these numbers are in billions Combined Trust Funds Calender Years 2004-80 . That's right; $68 trillion in current dollar assets by 2080.