ocial Security is facing a financial crisis. By 2013 our nation's basic retirement program will begin running a deficit, spending more on benefits than it collects in taxes. The Social Security trust fund is not a store of wealth. It is simply an accounting of how much one department of the government owes another. It measures a liability, not an asset.

Payroll taxes are already so high that three-quarters of all Americans pay more in payroll taxes than in federal income tax. Their return on those taxes will be far less than the return they could expect from investing in private capital markets.

Social Security's problems flow from its flawed pay-as-you-go structure. Social Security taxes paid by today's workers are not saved or invested; they are used to pay benefits for today's retirees. When today's workers retire, they must count on another generation of workers to pay taxes to support
their benefits. Demographics have made this system unsustainable. In 1950 there were 16 workers paying taxes to support every person collecting benefits. Today there are only 3.3; by 2025 there will be just 2.

Therefore, we support giving workers the option of shifting all or part of their Social Security taxes into individually owned, privately invested accounts, similar to individual retirement accounts or 401(k) plans. We believe that only a system based on savings and investment can provide a safe and secure retirement without burying future generations under a mountain of new taxes.

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This message is sponsored by the Cato Institute's Project on Social Security Privatization. For more information about privatizing social security, visit www.socialsecurity.org.