Bush Good on Social Security Though

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You've got to give Bush credit for touching the "third rail" of politics and coming out in favor of private retirement accounts. The latest Zogby poll put out by Cato shows that this is winner with 68% of the public supporting the idea.

NEXT: Necessary Assistance

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  1. I agree, Ronald. I can’t fathom why Social Security reform hasn’t been more of a high profile issue. A large portion of the public certainly has an appetite for it. Unfortunately, it’s a large portion of the public that doesn’t have as much lobbying power in DC as the AARP. Still, one would surmise that with a so-called “conservative” president and a so-called “conservative” majority in both houses of congress, this issue would be a higher priority than it has been. I guess for the near future all we can expect out of Bush and the gang is more sabre-rattling over Iraq and not much in the way of real thinking or real solutions to serious domestic policy issues such as Social Security.

  2. (Donning Cassandra robes) Privatizing social
    security can’t work.

    The retired population has to be served
    by the non-retired population, and if there’s
    too many retired, it won’t work no matter how
    you finance it.

    The only fix is to raise the retirement age
    until the number of retired is small enough.

    Okay, what will happen if you privatize social
    security? The return on investment will fall
    until enough savers can’t afford to retire at 65.

    They are all selling at once, after all, and not
    enough younger people will be buying, unless the age
    they do it at rises.

    If you keep social security, the age will rise
    to the same level.

    It’s a fallacy of composition to say that if
    everybody has a large 401(k) that everybody will
    have historically high returns. It only works
    for a few people. (“If everybody stands on their
    toes, everybody can see better,” the classic
    fallacy of composition.)

  3. Ron – the relative merits of any specific fix for Social Security are debatable, however, my point is that no politician in recent memory (except for Ross Perot) has really been willing to have a frank discussion about the need to fix Social Security. I guess (if you’re a politician) when the system doesn’t really start to break down until 20 years after you’ve left office, you really don’t have any motivation to care.

  4. Sounds like efforts to fix social security will be hampered by the immutable laws of economics – the longer we live now the longer we need our money for after retirement, so the higher the return needed. However if more people save higher amounts of money the interest rate you can earn drops so less gain is available. The net effect is that the ‘gift’ of a longer life has a cost – we will all end up working longer to save for a retirement that lasts as long as in previous generations. But so what? Ultimately effort has to be exerted to survive, and the longer the better by most folk’s estimation. The market has a means, as we’ve argued, to adjust for this naturally so it is still better to get it out of the government’s hands which allow the perpetual overrun risk to exist in the first place. People will not like it but eventually will get used to the fact that you can’t retire at 55, and expect to live to 95 at the same standard of living and make choices accordingly – work longer or live cheaper.

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