John Fund wrote this enlightening piece for the WSJ Opinion Journal 14 March.
It’s time they learn the truth. As Harvard economist Martin Feldstein has noted, the system’s solvency "is based on a complex accounting sham so duplicitous that it is hard to believe."…
But Roosevelt had indeed proposed a plan under which all workers would have been allowed to make periodic voluntary payments in exchange for certificates representing the amounts they had deposited. At 65, workers would have been able to trade in their certificates for annuities that paid up to $100 a month (the 1935 equivalent of some $1,300 today) based on their total deposits plus interest. In fact, Roosevelt expressly cited the need for private plans to become available as the worst of the Depression passed: "I am greatly hoping that repeated promises of private investment and private initiative to relieve the government in the immediate future of much of the burden it has assumed will be fulfilled."
But Congress balked. In an article this month titled "When Congress Killed Private Accounts," National Journal notes that Rep. Frederick Vinson of Kentucky, who later became Treasury secretary under President Truman, helped kill the private annuity plan, saying he saw no "particular need" for it at that time. But he also told his House colleagues, "Many of us think the time will come when the voluntary annuity plan, which rounds out the security program for the aged, will be written into law." Yes, the plan proposed by Roosevelt and rejected by Congress in 1935 is substantially different from the one Mr. Bush is advocating. But taking into account 70 years of progress in financial instruments, there are also many similarities….
The historian Eric Goldman wrote of FDR that "he trusted no system except the system of endless experimentation." FDR himself said in a speech at Oglethorpe University that "this country needs . . . bold, persistent experimentation. It is common sense to take a method and try it: If it fails, admit it frankly and try another. But above all, try something."
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