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November 21, 2007




Sorry, but this is a totally dishonest, or perhaps just massivly uninformed post.

Privatization is NOT an issue. That was pretty soundly defeated two years ago.

Krugman is NOT on the scene these past weeks trying to protect against privatization. He has thrust himself into the debate because he has visciously mocked and ridiculed Barack Obama for proposing one of the tweaks you mention above - eliminating the salary cap of 97,500 subject the payroll tax.

Obama's proposal is to make the most regressive of taxes into a somewhat more progressive tax, and thus extend the life of the Trust Fund indefinitly. It is not a panic response, but one that seems quite sound, and very progressive.

I love Krugman for many reasons, but on this issue he seems demented to me.

D. Cupples

Hey there,

Thanks for the comment. I didn’t comment on Krugman’s criticism of Obama; I commented on Marcus’ criticism of Krugman. Marcus says that Krugman says that SS has no problems at all. I disagree. In the penultimate paragraph of his column, Krugman said this:

"...But Social Security isn’t a big problem that demands a solution; it’s a small problem, way down the list of major issues facing America, that has nonetheless become an obsession of Beltway insiders."

When he says "small problem," I suspect that he means its fixable and doesn't have to be done this minute (or else). I think he is reacting against panic that could renew privatization talks because of the following paragraphs (starting about half way down his column – after the Tim Russert quote):

“How has conventional wisdom gotten this so wrong? Well, in large part it’s the result of decades of scare-mongering about Social Security’s future from conservative ideologues, whose ultimate goal is to undermine the program.

“Thus, in 2005, the Bush administration tried to push through a combination of privatization and benefit cuts that would, over time, have reduced Social Security to nothing but a giant 401(k). The administration claimed that this was necessary to save the program, which officials insisted was “heading toward an iceberg.”

“But the administration’s real motives were, in fact, ideological. The anti-tax activist Stephen Moore gave the game away when he described Social Security as “the soft underbelly of the welfare state,” and hailed the Bush plan as a way to put a “spear” through that soft underbelly.

“Fortunately, the scare tactics failed. Democrats in Congress stood their ground; progressive analysts debunked, one after another, the phony arguments of the privatizers; and the public made it clear that it wants to preserve a basic safety net for retired Americans.

“That should have been that. But what Jonathan Chait of The New Republic calls “entitlement hysteria” never seems to die. In October, The Washington Post published an editorial castigating Hillary Clinton for, um, not being panicky about Social Security — and as we’ve seen, nonsense like the claim that Social Security is a Ponzi scheme seems to be back in vogue.”

No, I wasn't dishonest, though I might have misinterpreted Krugman's words.


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