bruce is wrong i think about the drumbeat to fix entitlements as well.
Ornstein yesterday in the Oregonian was saying that entitlements were the
big problem facing the new administration,
and today “Marketplace” (public radio) went out of its way to
interview young people who said social security won’t be there for them.
My guess is that the bad guys will say the deficit is so high we have
to cut social security. it won’t make sense, but they don’t need to
make sense. or they will say we need to raise the retirement age.
that is always popular because young people know they will never get
old. and everyone knows that we are going to be living longer so of
course we should be working longer.
Or the economy will hit high unemployment and or high inflation which
will affect the “insolvency” date… and they will use that as an
excuse to cut benefits etc.
they don’t need to privatize it… though i bet the stock market
recovers and everyone says “see” the market always goes up… they
just have to “fix” it so there isn’t enough money in benefits for
anyone to be able to afford to retire.
then they will have what they wanted all along: downward pressure on
wages with old people unable to quit work, and young people afraid to
quit their jobs to look for something better.
(rdan here…a paper by Goolsbee in 2004 estimated a trillion dollars in fees could be generated by administering Social Security in private accounts…I must find the link later [here — PDF]. Profit in this sense is again money from money and appears to create little increase in working man wealth…say $250,000/yr wage earners and below.)