This is the title of a very good oped from Gail Collins. I would argue that among Gail’s many excellent statements, this one hits at the core of why this White House wants to adopt its proposal:
In any event, doing well under privatization is relative. Congress’s budget agency analyzed the privatized plan that is widely regarded as the template for future legislation and found that total retirement benefits – including payouts from the private account plus the government subsidy – would be less than under the present system. The amount available from the privatized system was less even after midcentury, when the current system is projected to come up short.
You see – Bush has to take away more from our retirement accounts than he gives back if he wants to cut the General Fund deficit without increasing income taxes. This oped is getting a lot of well deserved noticed as is this post from Brad Setser, which has this wonderful passage:
Don’t forget that the government — the non social security part — has expenditures well in excess of revenues RIGHT NOW. Dick Cheney apparently thinks cash flow deficits that have to be financed by issuing tons of debt don’t matter, but cash flow deficits than can be financed by drawing on the interest from your stock of existing assets are a real problem … interesting financial logic.