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The White House is now putting the first dollar signs on its plan for gradually phasing out Social Security and replacing it with a system of government-regulated private investment accounts. A few examples are included in this article out this evening from Reuters.

But an odd parity is emerging in the numbers — even the highly optimistic ones favored by the White House.

The proponents of phasing out Social Security say we have to get rid of it because the program is “unsustainable”, as Scott McClellan said today. The reason it’s “unsustainable” is that the program would need more funds to get through the demographic bulge created by the baby generation.

(This in itself is a highly debatable point; but let’s leave that for a later discussion.)

Just how much extra funds would be needed and whether those funds would come from borrowing or benefit cuts or new taxes is a matter of debate. But precisely those choices which make Social Security “unsustainable” in a few decades are the ones the White House is happy to make now in order to speed the process of phasing out the Social Security program.

Simply financing the ‘transition costs’ of phasing out Social Security will cost a good trillion or two dollars, maybe more — by the White House’s own informal estimates. And where on earth are we going to get that money? Borrow it, says the White House. Notta problem. In other words, we have to start phasing out Social Security now because if we don’t we’re going to face some big borrowing in a few decades. But we can avoid that horror of horrors by doing some big time borrowing now to finance abolishing Social Security we won’t have to face that terrible fate a few decades from now.

Makes perfect sense, right?

We’ll return with more detailed numbers and explanations in future posts. But the new numbers out from the White House only underscore the basic fact that this debate isn’t about funding or lack thereof. It’s all about who’s in favor of the Social Security phase-out and who isn’t.

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