Tuesday, January 04, 2005

More on Social Security private accounts

This seems like good news pointed out by Josh Marshall (first noted by Atrios):
What the president is proposing is that individuals can divert roughly 4 of those 6.2 percentage points into their private investment account.

Obviously this is an early draft of the proposal, and there is no guarantee it will pass. Nevertheless is very encouraging (though not surprising) that the President is being bold.

You may have noticed I am linking and quoting from the Left as well as the Right. There are two reasons for this. First, there is a lot more activity on the left side of the blogosphere about this topic than the right. There is some vitriol, but there are also solid facts as quoted above. Second, as I noted earlier, I actually wish for a substantive debate on how to address the issue.

In response to my previous post, commenter eRobin wrote:
There may be a way to craft a policy that combines the best of all worlds but the question at hand is do we trust BushCo to do that? The answer has to be a resounding "no."

Fair enough. I suspect a significant fraction of the electorate feels the same way (20%? 30%? 10%? Who knows?). The good thing is that we have a legislative process with hundreds of Congressmen and Senators and thousands of staff from the Executive and Legislative branches to craft the solution.

Most likely no one will be fully satisfied with the result. But it will not be dictated by one person.

So far, the Right has basically said that the current pay-as-we-go system can't survive the demographics of the declining workers to retiree ratio, and suggests to allow people to own some of their own retirement money which they can invest at higher returns than the old program is providing. Beneficially, this will also provide more capital to the economy to fuel growth.

The Left is mostly picking out details, like the 4 percentage points comment quoted above, and future benefit "cuts." The only substantial suggestion from the Left is to increase the payroll tax in one way or another.

Clearly, the debate hasn't been directly joined. How does the Left propose to compensate for the demographic problem? Isn't it better to get better returns through investment?

Hopefully we will get some discussion on this. There is time.

UPDATE:

More on the debate at Just One Minute (via Instapundit).

Secure Liberty is surprised at the vehement backlash from the Left at the idea of Social Security Reform, and also notes the demographic problem. Barry N. Johnson is cautiously optimistic. And an article on the topic by Paul Krugman didn't make Mark Coffey's day any better.

UPDATE 2: Frank J. weighs in, oh my.

UPDATE 3: Kevin Drum declines to engage in the discussion:
Luckily, Brownstein also reports that even centrist Democrats are backing off from any cooperation with Bush's privatization plan, and thank God for that.
Sigh.