Monday, February 07, 2005

Social Security

To say the least, it's interesting that Bush has chosen to begin his second term by touting a plan that is wildly unpopular, dubious economically, and likely to be a giant embarrassment if the privatization scheme does in fact fail. Even at this early stage of the discussion, when Bush is just embarking on a sales tour, the plan seems dead in the water. Josh Marshall, who along with Paul Krugman has made swiss cheese of the proposal, notes that it is unpopular not just in liberal, Blue America but in areas where Bush is extremely popular:

This isn't particularly surprising when you think about it. These are areas are often older, more rural and have more voters with lower incomes. These are states where President Bush has campaigned on a pseudo-populism which is belied by his own economic policies. Phase-out is bringing the contradiction to the surface.

This is certainly one of the great tragedies of American politics, that so many people vote Republican when it is clearly not in their self-interest. That's the topic for another post, as the point here is how much Bush has gambled on a plan that makes no sense and which he doesn't understand anyway. Check out this horrifying attempt to explain the plan to a friendly Florida audience:

PRESIDENT: Because the -- all which is on the table begins to address the big cost drivers. For example, how benefits are calculate, for example, is on the table; whether or not benefits rise based upon wage increases or price increases. There's a series of parts of the formula that are being considered. And when you couple that, those different cost drivers, affecting those -- changing those with personal accounts, the idea is to get what has been promised more likely to be -- or closer delivered to what has been promised.

Does that make any sense to you? It's kind of muddled. Look, there's a series of things that cause the -- like, for example, benefits are calculated based upon the increase of wages, as opposed to the increase of prices. Some have suggested that we calculate -- the benefits will rise based upon inflation, as opposed to wage increases. There is a reform that would help solve the red if that were put into effect. In other words, how fast benefits grow, how fast the promised benefits grow, if those -- if that growth is affected, it will help on the red.

Okay, better? I'll keep working on it.

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