David John and William Beach take the low road in their attempt to justify the claim that Social Security hurts blacks by asking us to believe that Beach and Gareth Davis fully answered their critics back in 1998.
Rather getting into the name-calling over this issue, let me suggest that an unbiased estimate of the rate of return would be an interesting statistic and ask the Heritage crowd to take the high road suggested by Brad DeLong who simply linked to the paper by Kilolo Kijakazi.
Simply put, Beach and Davis want us to believe that the rate of return under Social Security for the average black is negative, but Dr. Kijakazi noted that their model made several faulty assumptions, which led to downward biases of this estimated rate of return. Beach and Davis could have redone their calculation using more plausible assumptions. I guess I’m being too cynical when I suspect they did re-run their model and found that an unbiased model did not give them the answer that their political bosses wanted. But I could be wrong and perhaps the Heritage Scholars could do the obvious – rerun their model using more plausible assumptions and report back.