I just realized that the current financial bailout by our government is tantamount to a forced privatization of Social Security with all the costs going to the Social Security beneficiaries but none of the benefits.

The Social Security Trust Fund is running a current account surplus.  The surplus is being “invested” in special government bonds at low interest rates. The government is taking the proceeds from these bonds and spending them however it wishes.  Some of that spending is on the bailout of our financial institutions.  In the latest bailout plan, the government is taking huge ownership stakes in these institutions by taking warrants for stock options in return for the money given to these institutions.

Chances are very good that after the recovery these warrants will be worth considerably more than what the government has paid for them.  I don’t see any plan to give some of these profits to the Social Security Trust Fund that helped finance the bailout.  After this is all over, the government will still consider that the Social Security Trust Fund will not have enough money in the future to pay all benefits so they will either raise FISA taxes, or cut benefits, or both.

Why not give the Social Security Trust fund some of the proceeds from the investments they helped to finance?  After all, if it was a good idea for Social Security to invest in equities when they were priced very high, it is a much better idea to invest in them when they are priced low.

Admittedly, the Treasury is taking on some risk that supposedly the Social Security Turst Fund is not taking on, so a fair split of profits will require some thought.  This requirement of some thought should not be an excuse to deny Social Security any take in this transaction.