It would create no new debt for the government because, unlike President Bush's proposal, the personal accounts would use only the surplus payroll taxes now flowing into the Treasury. That surplus will hit some $85 billion next year, and grow in succeeding years . . . Preventing that money from being 'raided' by a spendthrift Congress and White House could be enormously popular with a cynical public.(HT Instapundit)
Simply return each worker's annual surplus payment in the form of a check marked "For deposit to a Social Security Roth IRA only" . . . The appearance of increased deficits from not allowing Congress to continue to steal the Social Security surplus from non-Social Security spending is not a cost of Social Security; it is a cost of a spendthrift Congress, and the blame should be placed right where it belongs---on those politicians who will not reform.
Yes, the DeMint-Graham-Santorum proposal uses the surplus to buy Treasuries, which Pearson disapproves because they would shift the moneys to a form of government debt, therefore a form of "I owe mes" that each worker writes out to himself. Pearson proposes Roths that channel the money back into the productive economy, rather than Ts that will have to be repaid by revenue taken from, in all likelihood, the same guy whose SS surplus bought them in the first place.
Still, I find it refreshing that some minds are still working at the SS problem and zeroing in on a particularly abusive aspect of the SS system, the misdirection of surpluses. I'd take pleasure in seeing that gigantic dripping teat being yanked from the lips of Congress.
Pearson's proposal also changes the incentive from early retirement to continuing productive work, anticipating significant advances in life extension. As they say, RTWT.