« Greenspan Warns on Credit Derivatives | Main | Warren Buffett Joins the Order of the Shrill »

May 07, 2005

There's Privatization, and then There's Privatization...

Matthew Yglesias writes:

TAPPED: May 2005 Archives: Some people have written in to question my assertion that conservatives probably could have privatized Social Security in the late 1990s had they not decided to pursue the Monica Lewinsky matter again... take a look at what Prospect editor Bob Kuttner was writing about seven years ago: "Fast forward to 1998. Several Democrats, led by Senators Robert Kerrey and Pat Moynihan, have now endorsed plans for partial privatization. There is a near universal sense that the program is in grave financial crisis. And the Clinton administration, having bought a little time by proposing that the budget surplus be earmarked for Social Security, is close to concluding that some form of privatization is inevitable..."

At this point, we need to take a deep breath, undergo a cortico-thalamic pause, and distinguish between the privatization1 that would have been proposed by the Clinton Treasury and the privatization2 that Bush wants to serve us.

Privatization1 would have:

  1. Created private accounts that were a good deal for beneficiaries.
  2. Been part of an overall plan that would have raised national saving.
  3. Preserved a baseline defined-benefit component of Social Security.
  4. Been implemented by highly-competent and public-spirited centrist technocrats.

By contrast, privatization2 would:

  1. Create private accounts that--with the 3% real clawback--are quite possibly a bad idea for many if not most beneficiaries.
  2. Be part of an overall plan that is at least as likely to reduce as to add to national saving in the medium run.
  3. May well eliminate (we're not sure because the devil is in unreleased details) the baseline defined-benefit component of Social Security.
  4. Be implemented by deranged monkeys--the ones who brought us our current deficit, the steel tariff, the bizarre Medicare drug benefit, last year's corporate tax monstrosity, and the Iraqi nuclear weapons program.

These are not the same thing at all, are they? The fact that they are called the same does not mean that they are the same, any more than that you can call them both "food" makes tiramisu identical to moose-dropping pie.

Pythagoras, if I recall correctly, got into similar problems. For Pythagoras, the one word "pneuma" meant "wind," "breath," "spirit," "ghost," and "soul." Thus the Pythagorean doctrine that eating beans was destructive of your soul...

Posted by DeLong at May 7, 2005 05:10 PM