Monday, January 17, 2005

Privatization still is a bad idea

From an editorial in today's Boston Globe:
Young people don't typically share a strong interest in issues like Social Security -- issues best discussed with two aspirin and a glass of water -- but the absence of young voices is peculiar. Listen to any argument for privatization and one thing is clear -- it's all in the name of young Americans.


And remember, young people are one of the largest and fastest-growing groups without health insurance. They will breathe dirtier air, inherit degraded public lands and national parks, and bear the burdens of our continued dependence on foreign oil -- all thanks to policies advanced by this administration.


Second, transitioning to private accounts will cost approximately $2 trillion without doing anything to improve Social Security's long-term finances. Since the government is already running a record deficit, that extra money must come from cutting federal spending, raising taxes, or borrowing more. There's little room to cut spending -- unless they cut more programs like college aid. But after four years of slashing taxes, the president isn't likely to raise taxes for any reason. This leaves just one option: more borrowing and more debt for young Americans.

Worse still, Wehner's internal memo makes it clear that privatization won't solve the Social Security problem. In addition to trillions in transition costs, the president's plan will include drastic cuts in benefits for future retirees -- today's young people. Without these cuts, he writes, "we'll face serious economic risks."

Third, with no changes to the current system, workers can expect higher benefits from Social Security than from a system of private investment accounts, according to a study by the nonpartisan Congressional Budget Office. That means today's twenty-somethings will be better off when they retire even if nothing is done to "fix" Social Security.

Private investment accounts are a tempting idea for young people, and conservatives know it. But just like much of this administration's ideological agenda, support for privatization rests on fear mongering, flawed economic assumptions, and a willingness to put faith in "the market" above facts and ahead of fiscal responsibility.
I think many people are either sick of the Social Security "debate" or else intentionally aloof on the subject. Although it's not really an issue that directly impacts anyone today, it's a price that we're going to have to pay in the future, and is therefore not very urgent in many people's minds.

(thanks to Tapped)

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