Last week someone leaked a memo written by Peter Wehner, an
aide to Karl Rove, about how to sell Social Security
privatization. The public, says Mr. Wehner, must be
convinced that "the current system is heading for an
iceberg."
But that's just the borrowing over the next decade.
Privatization would cost an additional $3 trillion in its
second decade, $5 trillion in the decade after that and
another $5 trillion in the decade after that. By the time
privatization started to save money, if it ever did, the
federal government would have run up around $15 trillion in
extra debt.
All wouldn't go well; I'll explain why in another column.
But suppose that everything went according to plan. Even in
that unlikely case, privatization wouldn't even begin to
reduce the budget deficit until 2050. This is supposed to
be the answer to an imminent crisis?
A responsible administration would reverse course on tax
cuts and the botched 2003 Medicare drug bill, both of which
pose much greater threats to the government's solvency than
the modest financial shortfall of the Social Security
system. But Mr. Bush has declared his tax cuts inviolable,
and he says that his drug bill will actually save money.
(The Medicare trustees say it will cost $8 trillion.)
There's an iceberg in front of us, all right. And Mr. Bush
wants us to steam right into it, full speed ahead.
For more information on some details in this article (like the numbers projected 50 years out about Plan 2), see a news article posted today (not an Op-Ed column):
Wall Street Hears Pitch for Social Security Plan
Technorati Tags: krugman, paul krugman, nytimes, social security, social security privitization, george w bush, bush, privitization
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