Paul Krugman Is My Hero

Social Security privatization will be the most significant domestic policy debate of the next two years. The issues aren’t that complicated if you dig just a little bit, but much of the public debate will be carried out with buzzwords and FUD.

For example, the other day I heard President Bush say that Social Security will be in the black only until 2018. What he means is that the Social Security Administration has predicted that payments to SS recipients will first exceed income from the payroll tax in that year. What Bush didn’t mention is that the SS trust fund will have a trillion dollar balance in that year and will actually be growing, despite the imbalance in payments, because of interest on the bonds held by the fund.

Paul Krugman has written the definitive article on Social Security privatization. If you read only one article on the subject in all that time, you must read this article.

Krugman promises to continue to talk about Social Security in his NY Times column. You will also find ongoing commentary on the issue at Kevin Drum's Political Animal blog. Here, for example.

Krugman's is the best summary of the topic I have seen, but there is also lots of more specific analysis of Social Security in posts by Max Sawicky at MaxSpeak.org. Here, for example.

UPDATE: Josh Marshall of Talking Points Memo has also been following the privatization debate. He is especially trying to make sure that Democrats in Congress don't give in to Bush and compromise on a partial privatization, which would amount to acquiescing to a phase-out of Social Security.

His latest post covers the problem of government debt and how it relates to Social Security. Our debt is huge, but not because of Social Security, which is actually over-funded. The debt problem is with the rest of the budget, which has been thrown out of whack by Bush's gihugic tax cuts and profligate defense spending. (And by Reagan doing the same things in the 80's.)