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.)


At January 3, 2005 at 6:21 PM, Anonymous Anonymous said...

I don't disagree, but what I'm annoyed about is that every day that the Iraq debacle is not the top headline is a small win for Bush&Co. The cynical bastards would prefer to talk about anything else, and get the press talking about anything else too.

Hence today's farce with the 3 presidents exhorting the public to contribute cash to the sunami relief, while Colin Powell is saying that money is not the problem and the relief effort is going surprisingly well. Pathetic note: The ploy worked. I can't even find a mention in this evening's stories of Powell's comments that I read this morning.

Larry L.

At January 9, 2005 at 7:20 PM, Anonymous Anonymous said...

Larry's comment echoes a thought that's popped into my head several times over the last few years, especially while hearing bits of the ongoing Social Security debates: this feels like an intentional redirection of the public attention. Lately, though, I've been broadening the scope of my suspicions.

I scorn conspiracy theory on general principle, and so had passed the lower-taxes-in-a-time-of-war maneuver off as another loveable non-sequitur. What hadn't occurred to me until recently is that I may have reversed the cause-and-effect relationship. My taxes aren't going up, my house isn't being bombed, I'm not being drafted. Ergo, I'm not really at war--not with terror, fear, anxiety, or trepidation of any kind. Sure, some of our brave lads may be off chastising some unwashed foreign bastards, but we ought to be thankful to have such a holy crusade.

I stand fast in believing that this is less the result of conspiracy and more of the current administration realizing that the best defense of policy is a good offense; nevertheless, I should probably move away from this open window . . .


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