The Babe Theory Of Political Movements.
Mar. 21, 2005 11:50 AM
Iran's Sham Election In Houston.
June 20, 2005 5:36 AM
Yes, Kanye, Bush Does Care.
Oct. 31, 2005 12:41 AM
Health Care vs. Wealth Care.
Nov. 23, 2005 3:28 PM
Americans Voting With Their Feet.
Nov. 30, 2005 1:33 PM
Idea Majorities Matter.
May 12, 2006 6:15 PM
Twilight Zone Economics.
Oct. 17, 2006 12:30 AM
The "Shrinking" Middle Class.
Dec. 13, 2006 1:01 PM
From Ashes, GOP Opportunities.
Dec. 18, 2006 6:37 PM
Battle Between Entitlements & Pork.
Dec. 21, 2006 12:31 PM
Let Economic Freedom Reign.
Dec. 22, 2006 10:22 PM
Biggest Health Care Moment In Decades.
July 25, 2007 4:32 PM
Unions Antithetical to Liberty.
May 28, 2008 11:12 PM
Right To Work States Rock.
June 9, 2008 12:25 PM
Social Security Reform Thursday.
March 13, 2008
Caption Contest: Enter Today!
Due: July 29, 2008
The Carnival Of Classiness.
Mar. 14, 2006
Quotational Therapy: Obama.
Apr. 4, 2008
Mainstream Melee: Wolfowitz.
May 19, 2007
Pundit Roundtable: Leaks.
July 9, 2006
A WILLisms.com(ic), by Ken McCracken
July 14, 2006
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Phony Social Security Reform: Adding On Entitlements
Beware "add on" accounts on top of the existing Social Security structure, instead of accounts as a replacement for payroll taxes. Add-ons are not real reform; they do not fix long-term solvency; they do not allow for better returns for younger workers; they do not diminish Social Security's burden on the economy; they do not create a true ownership society. Rather, they are merely an additional entitlement.
Beware the add-on account diversion. Although they may seem similar, they are not at all what the President is suggesting. And that's because they are bad policy.
The Wall Street Journal has a great editorial this morning about this misdirection, this red herring, on Social Security reform, and how the President's plan is different (and better):
The main virtue of Mr. Bush's proposal is that it would let individuals keep some of their own payroll-tax money, investing it for higher returns rather than turning it over to Congress to spend the way it is now. With annual payroll taxes expected to exceed annual Social Security benefits through 2018, the earlier these accounts begin the more money can be kept out of Congress's clutches. Think of this as Al Gore's famous "lock box," except that each worker would have his own lock and key.
The add-on accounts, like other "alternatives" proposed by the anti-reform forces, are part of a deliberate plan to muddle and confuse the debate. Don't get lost by these deliberately bad ideas. Don't settle for anything less than personal accounts, funded with part of the current payroll taxes. The discussion of add-ons is a purposive attempt by Democrats to confuse voters about the details of President Bush's plan.
To fund any of these add-ons, Congress would be taking money from general tax revenues. That means raising income or other taxes on some Americans to finance subsidies to others. Meanwhile, the politicians would get to keep spending surplus payroll taxes right through 2018, and they'd also avoid doing anything about Social Security's long-term financing shortfall. South Carolina Senator Lindsey Graham is exactly right to call add-ons "a political cop-out."
The Wall Street Journal is also correct in pointing out that the White House must be more forceful in separating, rather than blurring, the lines between the two types of personal accounts.
Ultimately, there is nothing wrong with individuals creating add-on accounts for their retirement, but those add-on accounts already exist under other names. They are called investment portfolios, 401(k)s, mutual funds, and the like. They are important for individuals, but they do not fix Social Security.
Posted by Will Franklin · 13 March 2005 05:01 AM