The Tar Pit

Thursday, February 03, 2005

Pro-reform Social Security Blogging on the Right is Lagging

Last week Hugh Hewitt asked: Pro-reform Social Security Blogging --Where Is It?

The short answer is that there isn't much pro-reform blogging on the Right when compared to the anti-reform blogging from the Left. Take a look at the latest Technorati search on "social security privatizing" and you'll see what I mean. Click back a few pages; the Left is on top of Social Security privatization in a way that the Right isn't.

Here's a look around at the privatization blogging on the right:


THE FOLKS at the CATO Institute liked the President's State of the Union Address -- and they should, because more than anyone it was the CATO people who inspired Bush's thinking on Social Security reform.

Read their reactions. Here's Ed Crane:

President Bush is to be commended for recognizing the need for personal accounts within Social Security...

More Prestopundit.

Donald Luskin at The Conspiracy to keep you Poor and Stupid:

ACCOUNTING BY AARPTHUR ANDERSON USANext catches AARP cooking the books in a poll showing public opposition to Social Security reform. In a letter to Congress, USANext reports that "National pollster John McLaughlin has a devastating analysis of the methodology behind the recent survey released by the AARP. It shows how that organization is attempting to falsely frame the debate over reforming Social Security by manipulating the American people, Congress, and the media. ...The following are examples of the misleading methodology:

Neil Boortz:

What happens in 2042 (or earlier) when working Americans are not paying enough in Social Security taxes to cover the benefits for retired Americans. Some of those IOUs in that filing cabinet are going to have to be cashed in. And where is that money to come from? The U.S. Treasury, that's where. Can you tell me where the huge surplus resides from which that money can be drawn? Yup, you're right. There is no fund anywhere just waiting to cough up the money to cash in those trust fund IOUs. This means that our congress will have to either (a) cut spending in other areas to come up with the cash; (b) raise taxes to come up with the cash, or (b) borrow the money. That's a crisis, folks, by any definition. A crises denied by Democrats .. denied for purely partisan reasons.

Lawrence Kudlow and others at Social Security Choice:

Two good pieces by Democrats who disagree with their party's seeming obstruction and opposition to Social Security reform. One from former Senator Bob Kerrey, and the other from Democratic financial advisor and fundraiser Steve Rattner. Both are willing to explore personal savings accounts, albeit government-controlled investments. But at least that’s a good step in the right direction. Kerrey talks about opening accounts at birth, with no taxes on income earned. He mentions a "muscular market response." Rattner points out that state and local pension plans, as well as the Federal Reserve and other government entities, "[are] invested in assets that Democrats brand as risky." He suggests using broad market indexes.

More Kudlow:

If you want to see why black Americans should favor President Bush's social security plan, please look at today's Investor's Business Daily. Using charts from the Social Security Administration, the Rand Corporation, and the Cato Institute, IBD makes a devastating case. For example, the monthly benefit for a black worker born in 1970, earning $13,000 a year, would be $665 under a funded social security estimate, compared to $2266 if invested 50/50 in stocks and bonds. In 1995, for the 50th income percentile, total net worth of elderly households was $77,800, but for blacks only $17,000. Please read the whole article.

Another Kudlow blog is at Kudlow's Money Politic$

Then there was the heavy emphasis on Social Security reform, including another surprise announcement: young workers choosing personal retirement accounts will eventually be able to set aside four percentage points, or roughly two-thirds of their payroll taxes, in the accounts. At lower tax rates on saving and investment,young workers will have strong encouragement to redirect their taxes to the investment markets where the money will finance entrepreneurship and creative technological advances rather than support unproductive government spending.

Over time this will be a huge contribution to economic growth. In effect, the social security reform will reduce government spending and increase personal saving. If unnecessary budget programs are indeed permanently eliminated, then Bush's fiscal restructuring will increase both public and private saving. For all the political screaming about "risky" market investing, the fact is that no respectable economist in either political party should object. For however dubious the evidence, honest Keynesians in the Democratic party would admit that greater national saving would reduce our reliance on foreign capital inflows, thereby narrowing the trade deficit and strengthening the dollar.

Don Boudreaux Cafe Hayek:

A safety net is something that one never wants to use; everyone wishes to avoid contact with it. It's there in the event of an accident, an unplanned mishap.

Whether you celebrate Social Security as the most marvelous innovation since opposable thumbs, or regard it as an unmitigated tragedy, it is not a safety net.

The Astute Blogger:

Look at it this way:


So why would ANYONE wanna government retirement stipend system designed in 1935?!

It is time to innovate. Partial privatization would be OVERDUE, EVEN IF there were no looming demographic shortfall.

When the paleo-libs deny there is a looming demographic shortfall, they are denying what Clinton and other libs admitted six years ago. Which is sort of like the paleo-lib position on Saddam: he was a grave threat to them in 1998 - when Clinton was in power - but a well-contained pussycat as soon as Bush became president.


Data from First Financial Benefits, which administers the Galveston Alternate Plan, shows that county workers earning slightly more than $17,000 a year can retire at age 65 with a monthly payment of $1,285 compared with $782 a month under Social Security.

Due to having more money withheld and the effects of compounding interest, higher income employees in Galveston see even larger benefits under the Alternate Plan. Workers earning $51,263 a year could retire at 65 with a monthly benefit of $3,846, while the same worker participating in Social Security would receive $1,540 each month.

The multipartisan Social Security Meta-Archive from The Earth-Based Initiative is worth a look.