Tuesday, March 01, 2005

Sound Advice on Social Security Reform

Paul Krugman's Op-Ed "Just Say No" in today's edition of the New York Times offers some sound advice regarding Social Security reform:
The important thing to remember is why the right wants privatization. The drive to create private accounts isn't about finding a way to strengthen Social Security; it's about finding a way to phase out a system that conservatives have always regarded as illegitimate. And as long as that is what's at stake, there is no room for any genuine compromise. When it comes to privatization, just say no.

If you need further corroboration, you might look at the article on "Pensions and Penury" in the February 27th edition of the U.K.'s Guardian Unlimited. Here's what its reporter concludes:

Two fundamentals are beyond doubt, however. Firstly, privatisation will offer higher potential benefits in return for greater risk - more so in the Bush plan, which would include stocks, than in the Galveston plan, which is based on bonds.

Secondly, social security involves a significant element of redistribution, because high earners help fund the pensions of the poor, who receive more than they pay in. In a privatised system, it is everyone for himself.

1 comment:

Tig said...

Laissez-faire economics rears its ugly head once again. Everyone who lived through the Great Depression is too old or dead to remind the rest of us just how horrible things can get.