Tuesday, January 18, 2005

On Social Security

This is one subject I never wrote about; I always figured I didn't know enough. (Or perhaps you instinctively thought of it as the 'third rail of blogging'; post about it and die? - ed.) I've been reading a lot about it, though, and today I found this superb report by Roger Lowenstein in the New York Times magazine. (Warning: 9 pages! What is it with you and multi-page articles from the Times lately? Are you being paid to increase their advertising revenue? -ed.)

Lowenstein, like many other writers for the Times, believes that President Bush is exaggerating when he claims an impending Social Security crisis. One way to use the market, he suggests, is to invest in equities directly; this would provide economies of scale, keep the Social Security Trust Fund out of the government's hands, and have the effect of decreasing risks for individual investors. Another option is to tweak the current system modestly to keep it solvent for 75 years or so; after all, long-term forecasts are notoriously inaccurate.

Personally, I'm inclined to believe that the administration may be manufacturing a crisis like they did with the WMD in Iraq, but I'm not really qualified to comment. If you, like me, are interested in the origins and history of Social Security, Lowenstein's article is well worth the read, regardless of your opinion on the best way to fix it.

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