Knight Ridder's The Miami Herald gives us another cause to doubt mainstream editorial pontifications despite the good intentions of the editors.

The United States Social Security system is in a state of crisis, insists President Bush. And he is correct in a certain, psychological sense, although the Social Security crisis is not as pressing as he would have us think. In fact numerous experts believe the current system could be saved with some relatively painless tweaking.

In their 2005 Series on Social Security, the highly esteemed editors of Miami's daily newspaper monopoly, Tom Fiedler and Joe Oglesby of the prize-winning Miami Herald framed the following statement in the by graphics of a Social Security Card, in the editors' February 2005 series on Social Security

"... The Social Security trust fund now holds about $1.5 trillion - the mother of all piggy banks. This fund will keep growing for years, making it an irresistible target.... The system continues to take in more than in pays out. When that ceases to be the case in about 13 years, it will be able to draw on the aforementioned $1.5 trillion (which will have grown by then) and the IOUs it holds from the U.S. Treasury in order to keep paying full benefits.... Some say the system will be broke in 13 years. This, too, is misleading. That's when the trust fund goes into deficit - more payouts than revenues - and will have to draw on its assets in order to make ends meet. But since those assets are bonds from the U.S. Treasury, it's a safe bet the system will continue to meet its obligations.... "

Read The Three Little Pigs. There is no such piggy bank in Washington! Rather, there is a papier-mâch?Epiggy bank, made out of the government paper - "IOUs" or "bonds " - mentioned elsewhere by the editors. Redemption of that paper would require raising taxes or selling debt to the public.

Wherefore President Bush’s insistence that we have a looming problem with Social Security is correct IF we look at Social Security as if it were a saved "fund." The immediate crisis is not the technical insolvency projected many years hence. The problem is that expenses will soon exceed income, so the government will have to start redeeming all the paper it exchanged for former surpluses. Again, the only way to redeem that internal debt is to raise taxes or to sell the papier-mâch?Epiggy bank or new bonds to the public.

In other words, the papier-mâch?Epiggy bank is simply the promise of the government to restore liquidity to the Social Security Trust Fund account. But it has spent those funds, and to raise the cash it will have to look elsewhere.

Imagine, for instance, that Tom Fiedler has a pension account in the form of a lock box, and that he has borrowed all the cash from that box and has given the money to needy people. Of course he placed his promissory notes in the safety deposit box, which he calls his piggy bank. Upon his retirement from the newspaper, he no longer has any money coming in, so he goes to his piggy bank and gets out his notes. Alas, he has no cash to redeem them or income to qualify for a loan. If he were the U.S. government, he would be The People Incorporated, hopeful immortal, and, since there are taxpayers born every minute to replace those who die, he could find people to buy his notes.

I too have been foolish on this very point of high finance. I went so far as to submit my own papier-mâch?Epiggy bank scheme to secure Social Security, an inalienable sinking fund filled with perfectly safe government bonds, to President Clinton. The Clinton proposal, when released, was nearly identical to mine, so I presume we were at least on the same wavelength. My inalienable fund would have taken advantage of the magic of compound interest, and would have accrued sufficient government credits over the years to paper the entire solar system with dollar bills.

Having had ample time to reflect on my scheme, I found it unsatisfactory to purchase the things actually needed by people when they retire from the workforce. Indeed, my scheme was downright foolish. But no scheme fits all contingencies. As the great American logician Charles Pierce pointed out in an essay on the laws of probability, even insurance schemes based on the soundest actuarial principles are bound to fail someday. Of course the same may be said about great civilizations such as ours, not to mention the Solar System.

Schemes are schemes. Schemes tend to conceal the reality they address. The money system itself is a scheme - money is a veil. Social Security schemes veil faults that some critical thinkers attribute to the cult of individualism in our society. After all, we would not need a social security scheme if people voluntarily took care of old folks so they would not fall into penury during the golden years they may very well deserve for one reason or the other - if charity must have a reason.

A student once asked Barry Goldwater if government should take care of poor people. "Do you know anyone that is not being cared for?" Goldwater responded. "Yes," said the student. "Then why don't you do what you're supposed to?" asked Goldwater. There would be no homeless and able-bodied unemployed people in our society if all Christians were perfect examples of the only Jesus Christ who ever lived - one reason Lucian the Apostate gave for admiring the Jews was the absence of unemployment and dire poverty in their communities. But it is not that simple nowadays, not given the complex and unpredictable exigencies of our mass industrial society, or so it seems.

Our Social Security plan was not originally intended to be an investment plan. It was intended to be a sort of non-profit, term insurance scheme, not a whole life investment scheme. The insurance designation is also a bit deceptive, for an insurance company invests surplus revenues in order to meet its obligations to its beneficiaries, whereas the U.S. government sweeps the Social Security Trust Fund surpluses into the general expenditure account.

In any case, the Social Security scheme as conceived is supposed to spread the risk of old-age poverty over the entire population. It is a pay-as-we-go social welfare scheme, presently misconceived as an investment plan. The premiums deducted from our checks are really tax deductions. Our paychecks might as well show other important social welfare deductions, such as Defense, Government Salaries, Private Welfare, Corporate Welfare, Internal Improvements, and so on.

The amounts deducted from our checks as our "contributions" have created the illusion of investment, and that illusion is partly responsible for the funding predicament we seem to be headed for. Whereas Social Security was intended for the elderly poor, whose earning powers wane with age and whose means of support are meager, affluent people who do not need support but who want it believe they are entitled to some return on their investment, and bemoan a small return in comparison to the stock market or other forms of investment.

To make matters worse, the Social Security deductions are not progressive: the rate does not increase with earnings, and high income is excluded altogether. Of course the rate would be much lower if benefits were limited to impoverished people who need them. People would then actually be free to invest more money in private accounts, and the government would not have to "permit" or "allow" them to invest in involuntary savings