In this morning’s post, I talked about today’s political environment as “a primal scream of denial, an insistence that easy answers be found — right now!” A recent Wall Street Journal/NBC News poll adds some weight to that description.
Voters were read a series of positions or actions and were asked whether they would make them more or less enthusiastic about supporting a candidate for Congress. In response, 50 percent said that they would have reservations about, or would be very uncomfortable about, a candidate who supported the economic policies of Barack Obama.
On the other hand, 62 percent said they would feel that way about someone who supported the economic policies of George W. Bush.
The poll also found that 49 percent of voters would feel very uncomfortable about a candidate who proposed to phase out Social Security and instead allow workers to invest in the stock market. Only 21 percent said they would be enthusiastic or comfortable with a candidate taking that approach.
That’s an interesting number, given that more and more Republicans are once again beginning to raise that possibility. But I want to set aside the polling numbers for a moment and consider a very practical problem with that idea.
Proponents of that approach almost always say that they will guarantee the Social Security of all current recipients as well as those over 50 or 55, while allowing younger workers to opt out the system in favor of private accounts. Politically and morally, that kind of guarantee would be essential, and everyone understands that.
So here’s the problem. The Social Security benefits for those older folks would have to be financed by continuing taxes on those still young enough to be working. For better or worse, that’s how the insurance system works: Today’s workers help finance today’s retirees.
So where is the money that those younger workers would set aside to invest in their own retirement? That would have to come on TOP of what they’re paying to support Social Security. They will be paying to support today’s retirees AND paying to finance their own private accounts, in effect paying for two retirement systems at the same time.
If you add in the fact that today’s and tomorrow’s taxpayers are obliged to repay $2.5 trillion to the Social Security Trust Fund — money that was borrowed over the last 25 years largely to help offset tax cuts for the more affluent — you’ve got a third retirement-related burden to handle.
I haven’t heard any proponent of private accounts explain how the accounting of all this could possibly work. Even President Bush, in his aborted attempt at privatization, never really explained how that transition could be financed without adding trillions more to the national debt. In other words, those 49 percent are right to be deeply uncomfortable.