Matt Yglesias Then And Now
November 13, 2004
I'm not sure it makes sense to take a position on Social Security privatization per se because "privatization" could mean any number of things, some of which might be better than the status quo and some of which might be worse. It occurs to me, though, to think of this. Say we didn't have Social Security or some equivalent program and you were a liberal trying to design some government programs to help out old people. What would you do?
snipped to one of Matt's suggestions (halfway through the fourth paragraph):
If you indexed benefit-growth to the growth in prices rather than the growth in wages you could make this "welfare for old people" program relatively insensitive to demographic shifts toward an aging population since wages grow faster than prices (barring severe macroeconomic problems that would stress any social spending program) thus making the burden something the economy could support more-or-less come what may.
January 4, 2005
The Bush plan will call for a massive cut in promised Social Security benefits by switching from "wage indexing" to "price indexing" as the method of setting the initial benefit level... The true shell game only gets started, however, when the advocates of cuts get around to explaining that nothing's really being cut here because people can make up the difference with the earnings from their private accounts.
The ellipsis simply cuts out other folks' arguments against switching to price indexing, not Yglesias's argument, which we presume remains in favor of price indexing, at least in the event a liberal were to design a new system.