If the government guarantees the payment of a benefit, someone some-
where will have to pay for it.

Most individuals would probably not have difficulty accepting this state-
ment as an unavoidable reality. It is not that wretchedly difficult a concept
to comprehend. Government has no magic powers to produce benefits out
of thin air. It can redistribute existing wealth, surely, and some among us
may also believe that it can facilitate conditions that better enable produc-
tive citizens to generate it. But it can't create something from nothing.

As the Social Security debate evolves, it is surprising how seductive is
the idea that there is a magic bullet lurking somewhere that will sever the
link between the benefits that the federal government will guarantee and
the burden that is placed on taxpayers of the twenty-first century. Every
manner of clever means is employed to create alternate Social Security re-
form proposals, in which beneficiaries "can't lose," the federal government
guarantees them a generous defined benefit, and yet the result is not an un-
tenable burden on the economy of the future.

It doesn't work that way. You would think this would be obvious, but
such is the power of self-deception that plan after plan has come out that
purports to work such magic and to avoid the necessity of making "tough
choices." This magic is done both with solutions in which all benefits are
funded from a Social Security Trust Fund and with solutions that create
personal accounts but guarantee the investor a certain minimum result. No

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