Thursday, December 09, 2004

My Comments to "Inventing a Crisis" by Paul Krugman

The article can be found here

Here are three Krugman quotes with my responses following each.

Krugman: "Privatizing Social Security - replacing the current system, in whole or in part, with personal investment accounts - won’t do anything to strengthen the system’s finances."

Wrong: No one is seriously recommending replacing the current system completely. It just gives people a voluntary option to have more control over a portion of their own money, coupled with the excellent chance of making a much larger return on their investment. The majority of the current social security program will remain unchanged for the time being. Furthermore, if an individual wants to keep the program completely unchanged in his/her particular case, he/she has a complete right to do so. Looks win-win to me!

Krugman: "(Social Security is) just a government program supported by a dedicated tax on payroll earnings, just as highway maintenance is supported by a dedicated tax on gasoline."

True: Social Security is definitely not an insurance program with a dedicated trust fund or ‘lock box’ as Al Gore put it. Congress funds the program payments yearly from the general fund.

John Attarian ( says "Social Security has no contract. It is welfare, not insurance. The original money-back guarantee had been removed in 1939. And the benefit cuts enacted in 1983 (gradually raised retirement age, benefit taxation, gradual cuts in the early retirement benefit) are further proof that it in fact has no real property right rights. So there you are: you have no accrued, vested property right to benefits, and you shouldn’t because your Uncle Sam just simply can’t tie his hands by giving you real property rights. He has to be free to shaft you if he has a "rational justification" for it, such as averting national bankruptcy when the retiring bay boomers cause the Treasury to bleed to death.

Attarian continues: "He (Uncle Sam) has to have that freedom, so he does. If you were born after 1945 Uncle Sam is going to cut your benefits. Mine too. I was born in 1956. I’ll be 67 in 2023, by which time Social Security is projected to run cash deficits of hundreds of billions of dollars a year. Does anybody really think Social Security will pay everybody all benefits mandated by current law under such circumstances, which will keep getting worse as tens of millions of us baby boomers flood the beneficiary rolls?"

Krugman: "..the politics of privatization depend crucially on convincing the public that the system is in imminent danger of collapse, that we must destroy Social Security in order to save it."

I think it would be truer to say WE MUST MODIFY (REFORM) Social Security or else it will ultimately destroy itself.

Why is the left be so opposed to Social Security reform? The answer is simple: Liberals want all of us to depend on them as much as possible. That’s how they derive their power (now where have I heard that before?). The current Social Security program represents the ultimate government dependency program.

It is also interesting to note that in Mr. Krugman’s article, he focuses completely on THE SOCIAL SECURITY PROGRAM per se as opposed to THE PEOPLE who that program serves!

Enjoy the rest of your vacation, Paul. You need the R&R.

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I once was a Democrat then I grew up.


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