The end game for Bush’s disastrous social security privatization plan is drawing near. This time Bush’s Reality Distortion Field™ is wavering, and the general public is getting the idea that it’s nothing more than an ultra-conservative attempt to destroy one of the most successful government programs ever. (Bush has already mucked things up at NASA, another brilliant success story–what’s next, is he going to try to dismantle the interstate highway system after this?) Even the Wall Street Journal (subscription only; here is an article about it) is now questioning the whole idea–and the answer is not positive.

It boils down to this: Bush claims that social security is headed for bankruptcy. And he’s dead wrong. Like with Apple Computer, people have been proclaiming doom since the start, and it hasn’t come true yet. Under the status quo, in another 40 or 50 years, social security will have enough money to make only 80% or so of its payments, unless, of course, we find another way to fund it. And there is a solution that won’t destroy social security or cripple the economy–but Bush claims there’s no feasible way to do that, so instead let’s privatize.

Unfortunately, privatization is not an answer, it’s a wrecking ball. It will take as much as 1/3 of all contributions into social security and divert them to private accounts. That will not help social security, it will devastate it, by sucking up so much of its funding that it will go truly bankrupt decades sooner! It will incur up to $15 trillion in debt before it starts paying off, which would be literally crippling to the American economy. Furthermore, the WSJ article shows how social security privatization has failed so miserably in other countries that many look at our system as an ideal they wish they could get back.

And, as it turns out, there is a real solution. Right now, the social security tax rate is 12.4%–meaning that, unless you are self-employed, you pay 6.2% from your own paycheck, and your employer handles the other half. But there is a built-in tax cut for the rich here: the tax cuts off at $90,000. So someone making $90 thou a year pays exactly the same amount of payroll tax as someone making $90 million a year. In other words, we have a regressive tax, where the rich pay less than the poor.

The Wall Street Journal (free article) points out the obvious solution: repeal the cap of $90,000, and the problem is solved. Social security will be solvent for at least the next 75 years, and there will be no need for privatization–not that there is any need for it now!