Anyone could have thought of it. But it's Charles Ponzi's lot to be forever remembered for a certain financial mechanism of shortcutting wealth.

Ponzi, an Italian immigrant, concocted a "Postal Coupon" investment enterprise which was to have paid 400 percent. And it did, of course...for the first enrollees. But since the only "investment" was in paying off earlier contributors with more recent enrollees' payments, the scheme's collapse was inevitable.

Ponzi's financial tool, a "bubble," or "pyramid," was of course an illegal swindle. Which of course is one more example, as with the lottery, payroll withholding and environmental regulation, of how certain behaviors are forbidden - unless done or run by the government.

One contemporary of Ponzi's was a certain New York Governor ascended to the Presidency, who envisioned a similar scheme - not for personal riches, but for retirement benefits. This was to be a mandatory pension plan, funded by the Federal Government with payroll withholdings. And while there's no record of it, doubtless the political-manipulation possibilities occurred to the canny Roosevelt.

And Congress looked at it and saw that it was good - or at least, good for them. And the Social Security Act was created.

To an electorate frightened and impoverished by the financial crash - which had been prolonged by the Administration's flitting with socialism, its threats of nationalizing the nation's heavy industry, and other investor-unfriendly postures - such a plan seemed a good idea. The economy goes up and down, but one unchanging is the Federal Government. Who better to guarantee that old folks are able to live decently, in hard times?

Who better, indeed. Then, as today, political history was not the most widely read subject in the land.

Nonetheless, and for all of that, the plan was created. In its inception, and through Roosevelt's tenure, there were sixteen payees into the system for every recipient. Payment money was to have been kept in a government account...again, if you can't trust your beneficent government, who can you trust? And Grandma had money coming in - even if she had been improvident in younger years and set aside no savings.

But times, they were-a changin.' People were living longer; medical progress was giving us that. And medical progress means medical costs. Hence, another New Dealer, Lyndon Johnson, tinkered further with the mechanism.

In addition to creating Medicare, Johnson oversaw the co-mingling of funds from Social Security accounts into the General Fund. The program was changed from an account modeled on a savings plan, to a pay-as-you-go plan. A naked, undeniable financial pyramid.

The Government Lockbox accounts were no longer locked. To give the appearance of legal propriety, these "accounts" were filled with "ironclad securities and bonds" - from (who else?) the Federal Treasury.

Of course, anyone who can figure out a pyramid scheme can see the ultimate end to this. It's the equivalent of a broker running a plan where he invests your money in "bonds" issued by the brokerage house. After all, they'll make it good, right? Their credit is fine. They have every intention of paying it back.

Intention, yes. But not the means...unless they're able to tap into yet another fabulously rich swindle.

That's the situation we are in today. Right now there are three payees to every recipient. Social Security checks are woefully inadequate as a meaningful income. Payroll deductions are crushing. Payees don't have the opportunity to invest in productive plans and take advantage of the miracle of compound interest.

And the number of recipients is growing - and their years on the receiving end are increasing as well.

Any rational individual should be able to see that the end is near. The crash won't happen tomorrow - but that's exactly why the system needs to be overhauled today. There's time for phasing in a rational system, allowing for preference, choice - and even opting out.

So why aren't we doing it? Why isn't this a bipartisan campaign, to create a government-oversight plan using private investment, on the model that has been miraculously successful in Chile?

Because the same thinking that got us in this corner is being used today - to keep us there.

To Grandma, Social Security is her last straw, her oh-so-tenuous lifeline. But to politicians of a certain bent, Social Security is job security. Threats and accusations, however reckless, have been used for decades to castigate challenges to incumbent officeholders - frequently Democratic officeholders.

What the government giveth, the government can take away - or at least threaten to. To unsophisticated voters, who filled their lives first with work and childraising, then later-year pleasures, and finally, late in life, television and the lottery, these threats are palpably real - and cannot be ignored.

It's one reason an increasingly conservative America has had difficulty replacing increasingly radical Democratic incumbent Congresscritters. To the ones who are left (and who remain), Social Security is a lifeline, not unlike what it is to destitute senior citizens. It's one of an increasingly limited number of options to demagogue a voter base no longer enchanted with Big Government's waste, inefficiency and obstinacy.

But the lie is exposed, like a cockroach scurrying from the light of truth. Millions of Americans have private IRA accounts. Millions more have private union or 401(k) pensions...in private securities. Millions more envy the legions of Federal employees and states' workers, who had been allowed to "opt out" of Social Security - in favor of investments in private accounts.

Think of that. Government workers, the ones who manage your allegedly rock-solid Social Security account, themselves are vested in accounts which make heavy use of private securities.

Maybe they know something you don't know.

There is no way, no rational way, to justify resistance to this plan as anything but naked demagoguery. As proposed it is optional and involves less than five percent of account monies. This is about as timid a way to wet the toes in the inevitable as one can imagine.

It's a needed, urgently needed change. If anything at all, it is a plan not ambitious enough.

It is being proposed by a lame-duck President to address a problem that could have been hidden for another decade. The President has nothing to gain politically. The incipient crisis is undeniable, even if the figures are not accurate in the specifics. Common sense urges a change - and good sense suggests to do it now, when there's neither pain nor panic.

The Democrats, in opposing this change, are casting themselves as beyond merely anti-war, anti-capitalism and anti-defense. They're revealing themselves to be blind partisans, reflexively anti-Bush - even to the extent of being anti-citizen and anti-American.

North Ridgeville, Ohio

February 10, 2005

* * * * * * * * *

JustPassinThru is a forty-six-year-old adolescent in varying stages of employment. He alternates between sorting the shambles of his life and sharing his misconceptions of on the Web.

==================================================