Monday, March 07, 2005
Talking Points has a good post about yesterday's Meet the Press roundtable. This post is only focused on the second part of that post - Joe Klein's comments about Social Security v. Private Accounts in the Industrial Age v. Information Age.

Here is what Klein stated:
I agree with Paul in that private accounts have nothing to do with solvency and solvency is the issue. I disagree with Paul because I think private accounts a terrific policy and that in the information age, you're going to need different kinds of structures in the entitlement area than you had in the industrial age. But it is very hard to do that kind of change under these political circumstances where you have the parties at such loggerheads.
In a follow-up post Talking Points is trying to seek out articles by Klein that explain his argument. I certainly don't presume to speak for Klein, but I suspect his rationale may have something to do with the following logic:

In the industrial age most workers had "industrial jobs," i.e., blue collar type jobs. Now, in the "information age," more and more workers are in white collar jobs, and more workers also have college educations, etc. We are, as a general matter, a better educated society in the information age. Thus, because we are better educated, we are more capable of making our own investment decisions. We do not need the government to make investment decisions for us.

Additionally, because we are better educated as a work force, I see two points. First, we should be allowed to use that knowledge to seek higher returns on investment than would be available via Social Security. I say that as a matter of principle - that we should be allowed to do this as we are capable of making our own investment choices - and not as a matter of fact that we will actually get higher return on investment. If the premise of the social security program is to create a system where you pay in in order to get out what you paid, i.e., essentially a forced retirement account - then this argument is valid. We should be able to make our own investment decisions for that account if we are capable of doing so.

The second argument is the point not made in the first. Since we are better educated as a workforce than we were in the "industrial age," it is possible - perhaps likely - that overall private accounts will have a higher return on investment than would the social security program. Sure there would be winners and losers. But if the winners far outweigh the few that "lose," than something can be done for those "losers," and we would still have an overall net positive effect.

I suspect Klein's argument is something along those lines, but I could be completely wrong. I hope he writes something soon on this issue, as I am sure it will be a good read - and probably much more intelligent and eloquent than what I just wrote.
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Location: Chicago, Illinois, United States

I am an attorney in Chicago. Politically speaking, I am an indepedent that tends to lean conservative on fiscal issues and progressive on social issues. I try to remain as unbiased and open-minded as possible. Please email or post any comments, and especially criticisms. If something I say is wrong, or you disagree - let me know about it!

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