- The Washington Times - Saturday, June 25, 2005

Since personal retirement accounts were first proposed to reform Social Security 25 years ago, the case for ownership has remained consistent.

Opponents of reform, however, have bounced from argument to argument with such fury that any coherence their opposition once had is gone.

Take the changing, bright red face of New York Times columnist Paul Krugman. Over the last year, he has emerged as one of the most vocal opponents of personal retirement accounts. His most recent stall tactic has been to shift focus away from Social Security and toward health care. America’s semi-private system is in “crisis,” he informs us, because it costs too much and delivers too little.

It’s interesting Mr. Krugman takes this tack because his criteria for designating a “crisis” perfectly describe Social Security. It is the largest government program in the world (costs too much) and gives retirees a return on their payroll taxes just under 2 percent (delivers too little). Why a health-care crisis but not a Social Security crisis?

Despite Social Security’s demographic and fiscal problems, Mr. Krugman wants to bury his head in the sand for another 40 years until 2042, hoping the problem will solve itself. Or will that be 2052? Opponents breathed a collective sigh of relief when the CBO announced Social Security wouldn’t collapse until 10 years later than previous estimates.

While most would consider that little more than hitting the snooze button on an alarm clock, opponents argued we can relax about the long-term financing because we’re not even sure there will be a problem.

Let’s play that again. The same people who warn us of the market’s “unpredictability” now say economic growth projections are underestimated and we’ll most likely see better than expected growth over the next 50 years. Apparently, the market economy is a gambling casino at the same time it is the guarantor of Social Security’s solvency.

In other words, the economy is too volatile to invest your money in but is a sure bet to lift Social Security out of its funding problem.

By twisting their arguments in so many directions, Democratic and liberal opponents have abdicated their most sacred self-imposed duty: guardianship of “the children.” In what is perhaps the largest collective game of Kick the Can ever played, they want to deny Social Security’s inherent problems until the political capital for personal retirement accounts is spent.

The current debate on Capitol Hill is the first serious effort by lawmakers to determine Social Security’s future. The program’s demographic, fiscal and economic threats will not lessen as time passes, yet opponents want to wait and see. Is this supposed to be in the best interest of the children?

Given the overwhelming empirical data that point to an impending meltdown, where is the logic in hoping the problem will fix itself? The AARP Web site asks us to help save Social Security for “the next generation,” yet it advocates fiddling at the margin while the program’s foundation burns.

With reform opponents losing the factual fight, many have tried to remake Social Security’s image. We now routinely hear the program described as an “intergenerational compact,” or the New Deal’s “crown jewel.” Some say it’s the greatest government program in history.

John Rother, AARP policy director, proclaimed repaying the Social Security trust fund debt a “sacred commitment.” It’s probably safe to assume those people don’t think the same of budget deficits, though they also are “sacred commitments” by the federal government to borrow and repay debt.

This is not to say there has been no consistency among the do-nothings. They’ve continually dodged choice and ownership.

Go back and read the columns of Paul Krugman. Flip through back issues of the American Prospect. Look at the anti-reform blogs. Although you will find some interesting rhetorical back-flips (AARP informs its members PRAs won’t give them any new control over their money because they already control their 401ks), they’ve ignored the core reform argument. After all, it’s much easier to compare the stock market to a roulette wheel than to tell citizens they shouldn’t have more choice and control over their retirement funds.

Michael Tanner is director of the Cato Institute’s Project on Social Security Choice.


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