Quote:
Originally posted by sgtclub
Why does SS reform get equated with private accounts?
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Because that's exactly what Bush wants. His Administration has been conflating the two issues from the beginning.
There are two legitimate issues out there: the eventual insolvency (decades out) of a guaranteed entitlement, and the country's low retirement savings rate. Bush wants to "solve" the second problem by drawing funds from and eliminating the entitlement, at least in part, and perhaps altogether. His proclimations about "saving" SocSec are, as far as I can tell, nonsense.
You may recall that private accounts were originally touted as THE WAY to solve the SS problem. Only recently has the Administration dropped that argument, in the face of unpleasant facts. Apparently, before the SOTU an administration official briefing
conceded that private accounts are at best net neutral effect on SocSec finances.
Bush has said that raising payroll taxes are not an option, which means that benefits will have to be cut, perhaps significantly. Further, according to the Krugman article I linked to above, the logic of Bush-style Social Security privatization "is, in effect, as if your financial adviser told you that you wouldn't have enough money when you retire - but you shouldn't save more. Instead, you should borrow a lot of money, buy stocks and hope for capital gains."
I know that there are many Krugman detractors out there, so I'm willing to be convinced otherwise. If someone can show me counters to Krugman's argument that doesn't use Bush Administration talking points that have been later discarded, I'd appreciate it.
