Reforming Social Security

Way back in 1997, there were some very smart people around talking sense about the Social Security program: that individual accounts might be a good idea; that the whole thing was a redistributionist Ponzi scheme that couldn't last:

I like [the] idea of providing each individual with a trust fund when young rather than retirement benefits when old, but we had better realize that this is a significant change in the character of the social insurance system. Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today's young may well get less than they put in).

How very far Paul Krugman has come in the intervening 14 years.