Friday, March 11, 2005

Echo-nomics

President Bush heard exactly what he wanted to hear Thursday during his "Social Security infomercial" in Montgomery: that he's a bold visionary whose Social Security privatization plan is a masterpiece of executive ingenuity. But everyday Americans who don't receive invitations to fawn over Bush at private parties remain justifiably skeptical according to a poll released today.

The Birmingham News even found someone in "the mostly white crowd, who got their tickets through Republican office holders," who was willing to say he left the event unconvinced that privatization was a good idea. That man said the town-hall meeting was nothing more than "a feel-good session" that was long on praise for Bush and short on details about his privatization plan. If people who are handpicked by GOP politicians to be avid privatization supporters are uneasy about the idea, what does that mean about its chances of passing muster with the general public?

Social Security's long-term financial problems, which are minor compared to those of Medicare, could be fixed by raising the retirement age or cutting benefits slightly or temporarily assessing Social Security taxes on income above the current $90,000 annual ceiling. If Congress chose the last option, a sunset clause in any such legislation could restore the ceiling to its present level, adjusted for inflation, after the demographic crisis created by the baby boomers' en masse retirement passes and the worker-beneficiary ratio returns to a more reasonable range.

Instead of touting those options, none of which undermine Social Security's structural integrity, privatization supporters seem to be re-arguing whether the Social Security system should exist at all. An Auburn University student who spoke Thursday illustrated this argument when she said, "[I]t doesn't seem fair to me that I will never see any of this money back that has been taken out of my paycheck and will be taken out of my paycheck." It's a valid point in theory, but to allay that concern, you not only would have to dismantle the entire Social Security system, but you also would have to eliminate almost every government project, since any given taxpayer doesn't receive a direct, personal benefit from most of the spending done with his or her tax dollars.

Bush's assertion seems to be that it's fundamentally unfair to force people to pay money into a retirement account that isn't making as much money as it possibly could. That line of thinking ignores two very important points. First, people are already free to make their own profit-maximizing retirement investments entirely independent of any government program. Second, Social Security exists not to maximize profits but to ensure that all Americans, regardless of the wisdom of their financial decisions, will have a minimum level of income upon which to subsist. They don't call it a social safety net for nothing.

In all likelihood, Bush's Social Security privatization proposal is doomed for the reasons that U.S. Rep. Artur Davis, D-Birmingham, listed during a speech last month. In Alabama, a state where Bush got 63 percent of the presidential votes in November, only one congressman has gone on the record in favor of privatization. All the fawning public-relations events in the world can't overcome that kind of tepid support from Bush's own party.

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