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Why Oh Why Can't We Have a Better Press Crops? (Have I Dropped into an Alternative Universe? Blogging)

I read Gail Collins writing:

I like partisanship. What I don’t like, and what nobody likes, is the brain-dead variety we see in Congress where the minority party would rather make a bill worse in the hopes that it would fail than make it better in case it passes. So the Republicans make it impossible for the Democrats to put cost controls in the health care plan by howling “rationing!” And back when the Democrats were in the minority, they made sure that any attempt to contain the cost of entitlements was immediately branded “destruction of Social Security”...

And I think... hmm... what have Republicans tried to do over the past decade to contain the cost of entitlements? Well, there was the unfunded Medicare Part D--that doesn't count. And then there was the 2005 Bush Social Security Plan... what was that about?

And I remember: The Bush 2005 Social Security Plan was a proposal to wind up Social Security over the next two generations and replace it with mandatory defined-contribution individual retirement accounts. And I remember that it was very hard for the Bush administration to even claim that the numbers made sense--they were, after all, leaving on the table (a) the benefits from diversification across individual portfolio strategies, (b) the benefits of diversification across time, and (c) the backstop risk-bearing capacity of the government.

In short, they were planning the destruction of Social Security.

Now there are reasons to destroy Social Security, at least partially, and replace it or supplement it with a system of mandatory defined-contribution individual retirement accounts:

  1. The existence of the Social Security Trust Fund within the government's accounts is a force decreasing pressures for rational fiscal policy.
  2. There is an equity return premium--now, especially, going forward boy is there an equity return premium! And a system that offers the poorer half of Americans access to the premium risk-adjusted returns from equity investments would be a good thing to implement.
  3. There might be a demonstration effect: if the government makes you save some in an IRA-like vehicle, that might induce people who ought to be saving even more in similar vehicles to do so.

I could get behind a well-thought-out and well-implemented "ownership society." But the game was the "ownership society," wasn't it? And the goal of the "ownership society" was the destruction of Social Security as we know it, wasn't it? That was supposed to be a feature of the Bush program--that the existing Social Security system had too many disabilities and drawbacks.

So from my perspective it makes sense to criticize the Democrats for dismissing the critiques of Social Security--the tendency of congress to spend the trust fund or use its balances to lower present taxes, the fact that under the current system the poorer half of Americans are effectively shut out of equity investments, the possible demonstration effects from moving to an explicit forced-savings plan in vehicles similar to those private investment companies offer.

But it makes no sense at all to criticize Democrats for saying that Republicans plotted the "destruction of Social Security." They did plot it.

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