Friday, December 17, 2004

"Buying into Failure," by PAUL KRUGMAN

So this Op-Ed article was posted in the New York Times today. It's entitled "Buying into Failure," and it's by Paul Krugman. It discusses social security, whether it really is as much of a problem as the conservatives say it is, and how George Bush is going to bankrupt the United States and make everyone poor in his process to reform it.

NYTimes.com: Opinion: "Buying into Failure" by PAUL KRUGMAN

If you don't want to make the free subscription to the NYTimes on-line, I've copied the article (in very Robin Hood fashion) here:

NYTIMES_buying_into_failure.html

Tom Bozzo's comment on this post also points out that Krugman's NYT columns also get posted on the "Unofficial Krugman Archive." Thus, this column is also found (with no advertising links) at:

The Unofficial Paul Krugman Web Page: Buying Into Failure

Now, the whole article is very interesting. I'll give a quote or two (also note that the article lists The Century Foundation as a good resources for more information about the dangers of privitizing social security):
Privatization dissipates a large fraction of workers' contributions on fees to investment companies.

It leaves many retirees in poverty.

Decades of conservative marketing have convinced Americans that government programs always create bloated bureaucracies, while the private sector is always lean and efficient. But when it comes to retirement security, the opposite is true. More than 99 percent of Social Security's revenues go toward benefits, and less than 1 percent for overhead. In Chile's system, management fees are around 20 times as high. And that's a typical number for privatized systems.

In the rest of the article, there are plenty of good examples from other countries that have a more privitized system. I recommend reading the article for those details.

Meanwhile, cut to a little later in the article...

So the Bush administration wants to scrap a retirement system that works, and can be made financially sound for generations to come with modest reforms. Instead, it wants to buy into failure, emulating systems that, when tried elsewhere, have neither saved money nor protected the elderly from poverty.

So I thought all that was interesting. See the article for more details.

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2 comments:

Tom Bozzo said...

Apologies if you're already familiar with it, but the NYT columns show up at the following "Unofficial Paul Krugman Archive" link:

http://www.pkarchive.org/column/column.html

It's a good place for permalinks to that material, which otherwise rapidly hits the NYT paid archives.

Cheers.

Theo said...

Thanks! I've made an update to the post reflecting that.