Saturday, January 23, 2010
Social security (partial) privatization proposals: they're back!
Michael Tanner from the Cato Institute has a piece in the Friday Jan. 22 Washington Times, “Social Security: Private Option: The Answer to looming entitlement disaster is opting out”, link here.
This op-ed refers to the social security privatization proposed during the Bush years and often recommended by libertarians and libertarian-leaning conservatives. Although shot down, partly because of the conversion cost (since the original entitlement in FDR days was just that; it was funded by contributions from original beneficiaries), Tanner argues it needs another look now.
Raising the potential security tax wage base to infinity will only extend “solvency” for Social Security by seven years, Tanner argues. Furthermore, dips in the equity markets because of instability like the 2008 financial crisis don’t mean that private accounts wouldn’t do well in the long run (although they would be a tremendous problem for people who got into this kind of arrangement later in the game).
Check it out.