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December 15, 2005

Vox Baby Does The Work Of The Angels

Andrew Samwick,  Jeff Liebman, and Maya MacGuineas have unveiled their new "Nonpartisan Social Security Reform Plan," which Andrew describes in brief at Vox Baby.  Long-time readers know that I am a proponent of privatization, primarily because a demographically-centered transfer system seems to me an inferior way to run a pension program.  But I am sensitive to the better arguments of privatization's opponents -- that a purely private system might shift too much risk to those in or near retirement, that private accounts do not themselves guarantee sustainability of the system, that too many of privatization's proponents serve up their proposals as if there is free lunch to be devoured by one and all.

The Samwick-Liebman-MacGuineas plan suffers none of these deficiencies and, Solomon-like as it is, essentially splits the difference between many different reform proposals -- part privatization and part traditional fix-er-upping, paid for out of a combination of expanding tax coverage and raising the retirement age.  As Jane Galt says, "that sounds like a plan" that "could achieve broad consensus across the left-right spectrum."

Much has been made of the power of the blogoshpere to move agendas that are overlooked, or resisted, by the traditional seats of power.  And much has been said about the growing influence of econ blogs.  Wouldn't it be something if we could band together and finally get real social security reform off the dime?

December 15, 2005 in Social Security | Permalink


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Of course I oppose the Samwick, et. al. plan. The reason is simple: the two major fiscal problems facing America are 1) Health Care and 2) the General Fund deficit. Both of those problems dwarf any SS shortfall.

Any good manager would start with the most serious problems first. Wouldn't it be great if the blogosphere banded together and pushed the National debate to those two issues?

I'm going to do my best.

Best Regards.

Posted by: CalculatedRisk | December 15, 2005 at 02:16 PM

Privatization is a shell game. There's nothing under the SS shell so, go look under another shell. There isn't anything there either but, it's a useful distraction.

Posted by: Lee | December 15, 2005 at 02:49 PM

A demographically centered transfer plan has its limitations but really isn't so bad. Previously we had a more or less steadily growing population that is now transitioning to a more or less steady state population so our plan will have to adapt but then should be stable, at least until avian flu hits or unlimited life extension comes our way.

Posted by: Lord | December 16, 2005 at 11:57 PM

While I like the privatization of my retirement account, it is not without its own problems. Plan as you like, there is no certainty. How much to save, what real return achieve, what crises face, how long work, how long life, much less what investments and what proportions. One can only do what one can and hope for the best. One can simplify these as the proposed accounts do, but then it is barely privatization.

Posted by: Lord | December 17, 2005 at 12:12 AM

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