Paul Krugman followed Cato’s Michael Tanner on Freshair
today-they’ll actually debate on March 15 in New York. I’m not sure
what color the sky is in Princeton, but here are some of his apparent
beliefs:
Even though stocks have averaged over a 6% annual return
over the long term, we can assume only a 4% return for people in
privatized Social Security and fees will cosume most or all of the 1%
premium over government bonds assumed for those who remain in the
current system.
A 25% cut in benefits is OK but a 55% is “gutting the system.”
It’s OK not to like a plan that you claim doesn’t exist.
Family gets more if breadwinner dies young under current system [and that’s a good thing?].
Black
men have lower incomes even though they die sooner and their survivor
benefits are better [and again this is a good thing?].
Black men are more likely to live longer in the next forty years than they are to earn more.
Argentina’s crisis was the worst in decades and caused by social security [even though Krugman never mentioned pensions as a factor at the time].
The
US needs to cut debt now that its at 40% of GDP, but Japan is able to
have low interest rates with 160% of GDP in debt. [Of course, Japan is
in recession again, so I’m not advocating we follow their lead.]
There’s universal agreement on global warming, but not on insolvency of Social Security.
It’s
not hard to find economic growth assumptions that save social security,
but these do nothing to change Bush’s lousy economic record.
Only ideologues want private accounts.
