It’s puzzling—no one seems to be talking about Social Security anymore.

Only a few short months ago, privatizing Social Security seemed all the rage. Al Gore ’69 had to rush to promote an alternative plan; Joe Lieberman was forced to take a “private journey” from privatization; and GOP nominee George Bush had confidently urged the parties to end the “politics of fear” and give every American a stake in the booming stock market.

Bush may have declared in his convention acceptance speech that “now is the time” for Social Security reform—but less than a year later, it seems that now is the time for anything but. Though the administration has been pushing tax and education plans full-steam, though battles have begun on everything from campaign finance reform to arsenic in the drinking water, the Social Security privatization camp is dead quiet. How could this be?

The easy answer, of course, is that the stock market crashed. Well, it hasn’t exactly crashed, but it’s certainly taken a downturn, especially in the high-flying tech sector that was supposed to continue flooding us with wealth for several more decades. Dreams of instant millions from a lucky IPO were once accepted as career plans for starry-eyed college sophomores; no more. Today, the chance to throw in society’s lot with the day-traders no longer appears so quite so tantalizing.

Yet the arguments in favor of privatizing Social Security are no worse now than they were 12 months ago. If anything, the fall in stock prices means that now is a better time to start investing our Social Security dollars—the markets’ motto is “buy low, sell high.” Would we have been better off throwing our nest eggs into the NASDAQ when Bush was hawking his plan a year ago, just before it lost over 50 percent of its value?

But the debate over Social Security was never over the arguments. If it had been, people might have started to notice that stocks simply can’t out-perform bonds forever. If stocks did consistently offer a better return for the risk, then who in their right mind would buy anything else? Smart, self-interested investors would simply keep buying stocks and selling bonds until the gap closed and the future returns disappeared. That’s how markets are supposed to work, at least, and most economists wouldn’t bet the nest egg on their basic theories being wrong.

Had cooler heads prevailed, people might have also noticed that no Social Security system would be able to pay the full returns from its investments. During the campaign, Bush repeated the mantra that even safe investments could get better returns than the Social Security trust fund—rock-solid government bonds paid out more money! Why not liberate Americans from the shackles of Social Security and let them make their own investments? But few seemed to ask why the trust fund, which invests everything it has in government bonds, has a lower rate of return than the bonds it holds. The answer isn’t a bloated and inefficient bureaucracy, but the simple fact that some of the trust fund’s revenue has to go to pay Social Security checks. That’s what it’s there for, after all.

And some might even have noted that there’s no way to improve on those trust fund returns without simply cutting off some group of retirees—which is what the Bush plan, minus an infusion of government money, would have done. Giving current workers new individual accounts without adding more money would have just been stealing from today’s elderly to pay tomorrow’s. Barring extraordinary intervention from Congress (read: raising taxes, cutting benefits or borrowing from other budgets), the most detailed available version of the plan would have sent the trust fund bankrupt for nearly two decades.

None of these concerns seemed reasonable last August, because the market was still shrouded in invincibility. But now the blue sky is falling. Americans are finding it easier to understand what the “risk” means in “risk-return”—and harder to see why what many economists described as a “historical mispricing” was expected to last forever.

Indeed, it was a beautiful dream. A smoothly rising stock market would have given us no need to increase taxes, no reason to cut benefits; money would have simply appeared where needed to cover any shortfall. If the downturn has taught us anything, it is that wishing cannot make it so.

But the Bush administration has not yet done away with its plans for privatization. The issue might now be on the back burner, but as soon as the tax plan goes through or campaign finance reform is vetoed—or as soon as we see the slightest uptick in the NASDAQ ticker—expect Social Security reform to come roaring back.

After all, as Bush so grammatically put it in his convention address, “The rising generations of this country have our own appointment with greatness. It does not rise or fall with the stock market.”

Stephen E. Sachs ’02 is a history concentrator in Quincy House. His column appears on alternate Tuesdays.