Two hat tips. First, Daily Howler is doing an excellent job of both explaining this issue as well as the spin from hacks such as David Brooks, including his 12/11 post. See his 12/13 latest as well as all of Bob’s excellent reviews from 12/6 onwards.
The second hat tip goes to Brad DeLong who has a knack for sequencing his posts – one which simply points to this from Matthew Yglesias who quotes Mr. Brooks and then properly objects to:
Before we get lost in the policy details, let’s be clear about what this Social Security reform debate is really about. It’s about the market. People who instinctively trust the markets support the Bush reform ideas, and people who are suspicious oppose them.
Brad also discusses the recent insights of Edmund Andrews of the New York Times with Brad summarizing as follows:
a 6.5% per year annual return expected in stocks is not the same thing as a 6.5% per year annual return in Treasury bonds. To pretend they are is to deliver a disguised benefit cut: the 6.5% per year risky stock return is equivalent to some lower Treasury return, how much lower depending on how risky stock investments really are and what the right price of risk should be. The Bush administration and Social Security Actuary Steve Goss are committing financial malpractice by pretending these considerations don’t exist.
For my part, I just rightwing hacks like Mr. Brooks would spend less time lecturing liberal economists on whether we trust markets (we do) and spend at least a little time trying to learn how markets actually work.