PL/pgSQL Function Problem

I am trying to create a function that creates a user
and adds a row to a table. It produces no warnings or
errors when I create the function but when I attempt
to execute it I get a syntax error. I do not
understand why this is happening. Any help would be
greatly appreciated.

SELECT create_author( 'name', 'username', 'password'
);

ERROR: syntax error at or near "$1" at character 14
CONTEXT: PL/pgSQL function "create_author" line 7 at
SQL statement

Here is the code:

CREATE OR REPLACE FUNCTION create_author (
VARCHAR(32), VARCHAR(32), VARCHAR(32) )
RETURNS INTEGER AS '
DECLARE
name_ ALIAS FOR $1;
username_ ALIAS FOR $2;
password_ ALIAS FOR $3;
authorid_ INTEGER;
BEGIN
CREATE USER username_ WITH ENCRYPTED PASSWORD
password_ IN GROUP authors;

INSERT INTO Authors
( Name, Username )
VALUES
( $1, $2 );
SELECT Max( AuthorID ) INTO authorid_ FROM Authors;

RETURN authorid_;

END;
' LANGUAGE 'plpgsql'
SECURITY INVOKER
RETURNS NULL ON NULL INPUT;

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