Raspberry Quotes Krugman

This morning, the Washington Post’s William Raspberry pointed out the faulty logic in the White House plan to privatize Social Security. He then quoted the New York Times Paul Krugman who has come to the same conclusion. Both men have seen through the murky rhetoric regarding the witless privatizing plan and they have arrived at the gaping flaw at its core. If the stock market is healthy enough to make your Social Security portfolio grow, then the economy will have been healthy enough to put the old Social Security plan in the black (“through a windfall of payroll tax revenue”, Krugman said). If the stock market is failing, then your SS portfolio is going to fail and the privatizing plan will have suckered you and the old SS plan won’t be there to pick up the pieces either. As Raspberry says, “If the president is so thoroughly convinced that the market will outperform the Social Security trust fund (invested entirely in U.S. government bonds), why won't he propose that the Social Security Administration invest in the market rather than in government bonds? Wouldn't the bigger return guarantee the actuarial soundness of the system? Ah, but if it didn't, the government would be stuck with making up the difference.” That’s the bottom line no matter who is doing the math. If the President has such blind faith in the stock market, why doesn’t he propose that the SSA switch from investing in government bonds to investing in the stock market? As usual, the Bush administration wants to cover the government’s ass while advising you to uncover yours and bend over.