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Today’s column about Social Security by Paul Krugman of the New York Times — in which Krugman declares that “the numbers the privatizers use just don’t add up” — gets a ringing endorsement from the faithful.
Max Sawicky at MaxSpeak offers this assessment:
People can quibble about the details, but the main point is solid as a rock. If you think the economy will be great for stocks, then the Trust Fund is in better shape too, and if you think the Trust Fund is in trouble, so is the stock market. And if you use one set of assumptions to advocate privatization, and another to foretell Social Security doom, then you are a fraudster. (It works the other way too. If you think the Trust Fund is in great shape, then stocks will be better too.)
The mega-philsophical point: If we are going to have private ownership of capital and indulge great economic inequality, it is those with the most resources who should bear the risk of economic fluctuations and uncertain investment. Working people should have a guaranteed, secure retirement, as well as insurance against the other contingencies. That’s the only social contract that makes capitalism bearable.
Michael Froomkin agrees — and sidesteps the semantic wars on the subject.
The economic assumptions required to generate the returns on stocks needed to earn the high returns predicted for private, personal, or whateveryoucallthem accounts require unrealistic assumptions.
And, alternately, if you believe our economy will have the kind of growth needed to earn the predicted returns, then there’s no Social Security crisis anyway, because that amazing economic growth will fund any possible future long-run shortfall.
Nathan Newman says there’s a crisis, but it doesn’t involve the future of Social Security.
[A]cross the United States, existing private pension plans are collapsing and taxpayers are picking up the bill through the Pension Benefits Guaranty Corporation. Those private pension funds are already underfunded to the tune of $450 billion. Now, there are a few reforms proposed for dealing with the potential costs to taxpayers, but very little debate about shoring up the overall private pension system.
A lot of folks think “private accounts” or expanded 401(k)s will do the trick. But in fact, the era of 401(k)s in the last twenty years has seen a decline in the net assets of the average retiree, when you factor in the disappearance of traditional pensions.
And, finally, an era passes. Andrew Sullivan bids adieu. (Or, as Kevin Drum suggests, maybe just au revoir.) Goodbye to daily blogging. We feel his pain — hey, there’s more to life than typing. And, as Sullivan notes, “I was doing this since Clinton was president and Osama bin Laden was largely unknown.” In blog terms, that’s an eternity.
–Susan Q. Stranahan
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