Social Security- the topic of today in the NYT...

Paul O'Neill gets it right about everyone needing to save, but gets the moral wrong:

In a civilized society we have a responsibility to take care of our own needs so as not to be a burden on others.

No, in a civilized society we structure our economy, culture, and social relations to avoid anyone being a burden on anyone. When we can't take care of our own needs in Paul O'Neill's "civilized" society, we become a burden to others, but if that burden is unnecessary because we could have structured society and the economy differently, then Paul O'Neill's society is simply cruel and barbaric.

Still, his idea is actually somewhat interesting, although it still has the drawback that O'Neill's nest egg:

... would then be invested in broad-based index funds with an objective of matching the overall rate of return for all investments in the United States. These funds typically have very low costs because they're not actively managed. That means there would be no windfall profit for stockbrokers in this system.

What that means, still, is that the working-slob rats would be nailed to the mast of US investments, and incumbent investors would get a free ride as a bevy of new capital flowed in. Until the inevitable happened- that is, until the rate of return for US equities was reached...that is, the whole process could make a bubble which would burst.

No foreign investments Paul? I think Chinese real estate has another 15 years in it at least.

The Magazine gets it right:

The campaign to privatize has not only been about ideology; it has also focused on Social Security's supposed insolvency. Moore's book calls Social Security a ''Titanic . . . headed toward the iceberg'' and a program ''on the verge of collapse.'' A stream of other conservatives have bombarded the public, over years and decades, with prophecies of trillion-dollar liabilities and with metaphors intended to frighten -- ''train wreck,'' ''bankruptcy,'' ''cancer'' and so forth. Recently, a White House political deputy wrote a strategy note in which he said that Social Security is ''on an unsustainable course. That reality needs to be seared into the public consciousness.''

The campaign is potentially self-fulfilling: persuade enough people that Social Security is going bankrupt, and it will lose public support. Then Congress will be forced to act. And thanks to such unceasing alarums, many, and perhaps most, people today think the program is in serious financial trouble.

But is it? After Bush's re-election, I carefully read the 225-page annual report of the Social Security trustees. I also talked to actuaries and economists, inside and outside the agency, who are expert in the peculiar science of long-term Social Security forecasting. The actuarial view is that the system is probably in need of a small adjustment of the sort that Congress has approved in the past. But there is a strong argument, which the agency acknowledges as a possibility, that the system is solvent as is.

Although prudence argues for making a fix sooner rather than later, the program is not in crisis, nor is its potential shortfall irresolvable. Ideology aside, the scale of the fixes would not require Social Security to abandon the role that was conceived for it in 1935, and that it still performs today -- as an insurance fail-safe for the aged and others and as a complement to people's private market savings.

Funny that the same folks who'd want to crucify Dan Rather are silent about the Bush administration's lies on Social Security and the propagandizing of this false crisis funded by their own tax dollars!


Where is the outrage?