In this country, it has become received wisdom, perhaps more extreme than mandated in the constitution, that there is a separation of church and state. Would that this precept, even in a mild form, be applied to the Social Security Administration.
As Sylvester J. Schieber and John B. Shoven note several times in their provocative new book "The Real Deal: The History and Future of Social Security" (Yale University Press, New Haven, Conn.), "enthusiasm bordering on religious zeal . . . has permeated the organization" from the beginning in taking the Social Security agenda to the eager American public.
There is good reason for such a separation. Without that fervor, combined with a subtle ideological inclination for wide-ranging government-provided social programs, Social Security likely would not have grown so inexorably huge, so politically powerful, and so misguided and intractable to reform.
"In some regard that agenda was no more complicated than giving away money," the authors write, and so the public was beguiled. That zealotry swept up not only ordinary citizens, who have been over the years so resolute in supporting its programs, but also many scholars and other policy experts.
Paul A. Samuelson, the Nobel laureate in economics, suggested, the authors write, that a pay-as-you-go retirement system "could be sustained over time even though it had certain Ponzi-scheme characteristics."
"The beauty of social insurance," they quote Mr. Samuelson as writing, "is that it is actuarially unsound . . . A growing nation is the greatest Ponzi game ever contrived."
But as the "The Real Deal" authors point out, "Paul Samuelson's dream of an ever-expanding workforce earning higher and higher wages has not been fulfilled."
Demographics and economics trump a scholar's audacity. Thus, Social Security's promised benefits are in jeopardy because of it is indeed "unsound."
Filled with such vignettes on policy analysis and sketches of how government policy was formed, the book is a well-written narrative mixing history of the program's development, stories of policy makers and actuarial examples that are easy to grasp.
At first one might gasp oh, no, not another book on Social Security. But this treatment is no dry tome. It is engaging, filled with astute analysis of how Social Security policy has been shaped from its beginning to this day and how it should be reformed to provide benefits without financially harming individual taxpayers or the economy.
The authors are very good analysts, combining their vast knowledge and experience. Mr. Schieber is vice president of research and information at Watson Wyatt Worldwide in Washington; Mr. Shoven is professor of economics at Stanford University.
So what is their answer? They consider options from around the world and proposals in this country to offer a number of solutions fitting the various missions of Social Security. Among them: A two-part plan, part defined benefit and part defined contribution, the latter providing for participants to invest some funds. They would preserve the disability and early-survivor insurance of the existing system.
Even at some 470 pages, this book will likely make the reader sorry the authors' brilliant account has come to an end. Unfortunately, they cannot write the end of the Social Security story. It now is in the midst of a sad chapter on the stalling of reform in the face of its protracted financial crisis.
The presidential campaign may revive flagging reform efforts. Like all of us, the candidates need to read "The Real Deal."
