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Forget Sweden

So now Social Security has become the latest plaything for economists to try out their pet theories.

Forget the fact that it has been handled quite nicely by statisticians for the last 75 years, to the point where Social Security takes in more than it pays out and will do so up until 2042 (2052 if you believe the nonpartisan Congressional Budget Office figures). Even after 2042 it will pay 80 percent of benefits. Forget the fact that the gap in 2042 can be fixed with minor tinkering—raising the retirement age by six months, raising the income cap limit, increasing the payroll tax slightly. Oh, and forget the fact that privatization will do nothing to close this gap but will require further borrowing by the government of trillions of dollars, adding to an already grossly swollen budget deficit. And yes, forget the fact that in the market there are always winners and losers, so perhaps the name should be changed to Social Insecurity, as future retirees face the lottery of the stock market.

The article touts the Swedish experience. But a more accurate comparison would be with a country closer in culture and population to ours. What, for example, was Great Britain’s experience when it began to privatize government pension funds in 1985? Disastrous. Half a million Brits opted to go back into the government’s program, with another 250,000 expected to join them. Even the Association of British Insurers urged its member firms to warn those who had taken tax rebates to open private accounts that they might have made a bad choice.

One of every six Americans collects Social Security. Without it, 48 percent of beneficiaries would live below the poverty level. Benefits account for 39 percent of the aggregate income for those over 65. Social Security is not just fodder or data for economists to test out theories of capitalism. It benefits real live people who depend upon it. Wrecking it is not just immoral (do economists factor this into their theories?) but evil. If one were paranoid, one would have to conclude that privatization of Social Security is simply a scheme to wreck it and thus dismantle all vestiges of socialism in this country, irrespective of the harm it would do.

For a fuller discussion of these issues, visit my Web site, socialsecurityfacts.net.

Thomas Glynn, AB’58
Brooklyn, New York

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