Thursday, April 07, 2005

It takes a dictator to Privatize Social Security.

NPR : Examining Private-Account Pensions in Chile
Click on the link and listen to the story. Chile has had private-account-style social security for 20 years, and it's pretty successful. How'd they do it? Pinochet, the murderous dictator that the US supported, slashed spending to make it work, and you can bet he didn't cut back on the military. The radio story also compares social security programs in many nations, particularly in Latin America. The number one factor leading to a successful system: Fiscal solvency of the government as a whole.

Bush could take a lesson here. When he tells us the social security trust fund is just a bunch of paper IOU's, he's telling the world he has no confidence in the US economy (or more precisely, the US government's finances). US Treasury bonds are widely regarded as one of the most secure investments there is. And Bush tells us we're in danger because that is "all" we have in the trust fund? When what we need is solvency, he spends irresponsibly and stirs up needless fear that our government is not solvent. Great. Just great.

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