THE PIG IN THE PYTHON

Demographers define the baby-boom generation as ''the pig in the python'': a huge bulge in an otherwise skinny age circulation, progressively relocating dvery own the circulation as the boomers age. As the pig's snout philosophies the python's nether areas, it poses 2 distinctive plan problems: a narrow ''financial'' difficulty and also a more comprehensive ''real'' trouble. But the debate in the presidential campaign doesn't seem to be about either.

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The ''financial'' trouble is how to pay for Social Security. This difficulty is a tradition of Social Security's pay-as-you-go past: because the baby boomers' contributions were provided to administer generous benefits to earlier generations, tbelow isn't sufficient money in the mechanism to pay the benefits promised to the boomers themselves. The great news is that fixing this financial trouble isn't all that hard. Despite the apocalyptic rhetoric you sometimes hear, affordable injections of money would enable the system to run untroubled for at leastern 50 more years. It's just a issue of encountering up to facts.

The ''real'' problem is that in a few decades the age circulation of the U.S. in its entirety will certainly look favor that of Florida this day. How will certainly a fairly little variety of employees be able to create sufficient both to live well themselves and also to administer the astronomical population of retirees through the conventional of living it expects?

This problem is much harder to settle. The just answer -- other than allowing large immigration -- is to make tomorrow's employees as productive as possible. We deserve to hope for a technical fix; through smart sufficient devices, who demands workers? But a responsible government would certainly meanwhile attempt to ensure that national savings -- public plus exclusive -- are high, so that future workers are well equipped through capital and not burdened with huge international debts.


Alas, the campaign seems to be revolving roughly a quite different issue: the perception that Americans obtain too low a return on their contributions to Social Security. As I've explained in previously columns, the implicit rerevolve on Social Security contributions is low just bereason today's employees are in impact being taxed to pay the system's debts from the previous. You may not favor that, simply as you may not favor the truth that 15 percent of your federal taxation dollar goes to pay interest on a debt largely run up in the 80's and at an early stage 90's. But in both situations the debts are a truth of life.

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Yet the salesmanship bordering George W. Bush's Social Security plan is all around the meaningmuch less contrast between the retransforms that an unburdened individual have the right to gain on investments and also the implicit rerotate that a very-much-burdened Social Security mechanism have the right to market. And Al Gore's brand-new plan for subsidized retirement accounts also isn't about the genuine problems; it's a solution to that salesmanship.

That sassist, Mr. Gore's arrangement might have been worse. It won't break the budget; it probably will encourage somewhat more private conserving. And, choose Social Security itself, it will certainly be steady -- that is, it will tend to narrowhead disparities in wide range.

You likewise need to provide Mr. Gore some points for honesty. The details of his setup are completely spelled out; he has also come clean about just how he will certainly extend the life of the Social Security system -- namely, by transporting money over from the general budobtain. By contrast, Mr. Bush has actually sassist nopoint around exactly how a lot he plans to reduce benefits in rerevolve for permitting employees to invest their contributions in other places, let alone exactly how he will attend to the overhang of duties from the past. All he supplies are magic asterisks: ''*details to be provided later.'' My guess is that if and also once Mr. Bush lastly does provide the details, the size of the proposed benefit cuts will certainly start a political firestorm, forcing him to use general revenue to rescue Social Security after all. But that won't happen until after the election.

And wright here will the money come from? Remember that Mr. Bush is additionally proposing expensive tax cuts. Aside from eliminating a excess that could have actually been offered to aid Social Security, those cuts will certainly encourage the nation overall to consume even more and also conserve much less, precisely the opposite of what an aging society need to be doing.


At the same time the pig is still in the python, inching inexorably towards its destiny. Is anyone paying attention?