I have been getting emails from Democrats blasting President Bush on Social Security—and blasting me for the column I wrote defending the idea of personal accounts. In general, these arguments accuse me of being a Republican shill, just like on the Iraq war, and accepting a bunch of lies.
Well, I was against the war. I called it “a Republican war.”
I support the Republicans’ idea of individual accounts because I believe it is my money and my life. I am one of those people who never liked Social Security and would welcome a way to get out of it. The defenders of Franklin Roosevelt’s system accuse all supporters of personal accounts of having this hidden motivation. For many of us, it is not true, but it is true of me. I think if personal accounts were offered, most young people would take them, and that in two generations Roosevelt’s system would be gone. I think that would be just fine, because there are better ways to handle the risks of old age—more enterprising, wealth-creating ways, and ways more in tune with the American ideal of “life, liberty and the pursuit of happiness.”
The problem with individual accounts is not so much the risk, the “gamble,” of long-term investing in a diversified portfolio of stocks and bonds. The risk is vastly overblown, and is not akin to slot machines, roulette or anything you'd find at the tribal casino. The problem is paying for the transition--paying the benefits of the retired people who are counting on the tax money from younger workers. It’s a big problem. It’s doable, but it would require the rest of the government to get its budget in order, which Bush has not done. The Democratic criticisms of Bush’s deficits are on target.
But the arguments that there is nothing to worry about, that we can let Social Security coast along for another 10 or 20 years, are fatuous. Often this view is expressed in the insistent assertion that Social Security is “not a crisis.” This is a stupid argument on both sides. The concept of “crisis” makes no sense when applied to an issue of demographics and decades. Forget “crisis.” Social Security is a slow-growing but immense problem, and it demands attention. Yeah, we can put it off, but it will cost us dearly to do so. We have already weaseled away ten years, at least: I have followed a national debate on this topic for at least that long, and it was clear in 1995 that the system was unsustainable. Finally the issue is on the front burner. Let's settle it.
It doesn’t have to be solved by individual accounts. It can be done by tax increases or benefit cuts. But let’s have the argument now and deal with the problem now.
Respond to Bruce.