Monday, November 22, 2004

How Bush will Destroy Social Security

Robert Reich summarized the key danger of Social Security privatization in the American Prospect. Reich says in part:

There have been, and will be, equally dumb ideas emanating from the Bush administration, but privatizing Social Security surely will be in the qualifying round for the first prize.

Start with the irrefutable fact that Social Security is a pay-as-you-go system. The payroll taxes of today's workers go to today's retirees. And when today's workers retire, they'll be supported by the next generation's payments into Social Security. In other words, Social Security is a compact between generations, based on trust. I pay into Social Security to support my parent's generation in their retirement because I trust that my children's generation will pay into Social Security to support my generation in our retirement

If their Social Security payments are diverted into their own private accounts, their money won't be there for my generation's retirement. The compact will be broken.

Looks like Robert agrees with my Stupid Pond assessment.

Robert Reich is the Maurice B. Hexter Professor of Social and Economic Policy at Brandeis University and its Heller Graduate School. Before heading the Labor Department, Reich was a member of the faculty at Harvard University's John F. Kennedy School of Government.


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