August 07, 2005
Why Oh Why Can't We Have Better Think Tanks? (Yet Another AEI Edition)
And, while they're at it, what has AEI produced in the way of macroeconomic analysis that is worthwhile? Can't the funders find something better to do with their money?
Mark Thoma reads Kevin Hassett so that the rest of us don't have to:
Economist's View: Social Security Reform Stopped by Democrats' Radical Economists: Kevin Hassett of Bloomberg says he is frightened with the thought that Democratic economists might be running the country again some day...:
Until two weeks ago, Social Security reform was sort of dead. But now it seems to be all dead. The breakdown occurred when the administration backed away from a proposal making its way through the House of Representatives that would have introduced personal accounts without specifically restoring solvency to the system. Ben Bernanke, chairman of President... Bush's Council of Economic Advisers, publicly signaled the White House's displeasure with such an approach. Asked if restoring solvency was an inviolable condition, Bernanke said, “Yes, I think the president will insist on maintaining the long-term solvency of the Social Security system.” The word from... up on Capitol Hill, is that this signal from the president sucked the remaining life out of the House measure....
Another thing we learn from the demise of Social Security reform is that when it comes to economics, this is now Howard Dean's Democratic party. This completes, really, the economic radicalization of the Democrats, and it is a frightening picture -- frightening if you consider that they might run the country again some day. The fact is that the Social Security reform proposed by the president is quite moderate.... If private accounts were introduced, then you might buy a U.S. Treasury bond and hold it until retirement.... The labels change but the economic difference is not earth shattering.... Instead, we got only obstruction. Perhaps this is because Democratic leaders don't have any novel policy ideas they would like to see implemented. Perhaps it's because the Democratic leadership is currently to the left of the Mongolians on Social Security...
But why on God's green earth should any Democrat endorse Bush's Social Security proposals? They:
- Offer beneficiaries private accounts that are likely to be a bad deal.
- Include no mechanisms to raise national savings.
- Eliminate or cripple the valuable defined-benefit nature of the current program.
- Fail to restore expected long-run solvency
- Fail to put in place mechanisms for automatic adjustment should the system fall further out of balance.
- Give us no reason to have any confidence that the plans will be competently implemented.
Why on God's green earth should any Republican endorse Bush's Social Security proposals?
It's a mystery.
Posted by DeLong at August 7, 2005 07:08 PM