Off the mark

I'm sure Josh Marshall can fight his own battles, but I thought I'd say something on this from Outside the Beltway:

As to Marshall's "why not both" question, the answer is really simple. First, the president essentially is saying both, just giving people the option of going with anything from 96-100% of their current Social Security taxes and 0-4% into their personal accounts. Second, a lot of people simply can't afford to put everything they're currently required to put into SS plus more money into a 401K-type plan. Finally, the plan is supposed to help alleviate the impending strain on SS that comes from the fact that it really isn't an investment plan at all but rather an inter-generational wealth transfer. To the extent that we remove younger workers even partially from SS, we decrease the amount their children and grandchildren will have to fork over to subsidize their retirement.

Marshall's "why not both" question concerns the idea that the government encourage investing on top of already existing Social Security benefits. OTB's argument is slightly misleading in that regard. The President's proposal may technically fall under that umbrella, but still will involve cuts to the guaranteed benefits from Social Security. Marshall's suggestion is 100% benefits plus encouraging investing.

The second point could be addressed with some sort of tax credit perhaps, or a matching investment from the government to encourage investing. I would say, hoever, that if private accounts really are a great idea then Bush should figure out a way to get them done without breaking the back of Social Security to do it. Once they've proven us all wrong, and those accounts have led everyone to financial nirvana, then we can talk about dismantling a currently much needed program. I have a feeling this would generate much more support.

The final point is that the real alleviation from the plan ends up being a cut in benefits. The private account is a gamble in trying to make up for this cut. On their own, they do nothing to fix the problem. They put more families at risk.