One Generation Got Old, One Generation Got Sold
It's worth a listen. In part, it's real world West Wing stuff, as much about how will the policy play with different groups as what will it actually do. You could hear Josh Lyman giving this editorial. But the idea gets really interesting at the end, where Erlich suggests that the existing Social Security network be left in place, but an additional 2 or 3 percent withholding be levied on paychecks, which would be directed into effectively a traditional IRA, under the complete control and ownership of the individual.
My comments about Social Security are already on TRP's site; to summarize, Social Security only makes sense as welfare, and that's how we ought to treat it. Treating it like a savings account is simply foolish.
The economist in me likes Erlich's proposal. It continues to pay for welfare for the old, and it creates savings for the vast numbers of people who don't have 401(k)s at work and never quite get around to putting money in an IRA on their own. It creates wealth in private hands which ought to ultimately reduce the pressure on this Ponzi scheme of a system. At its heart, this is a good idea.
Unfortunately, there's also a lot of folks out there who will see this as another Big Government Liberal Tax. And there are a lot of people out there who aren't saving for the future because they really don't believe they can afford to. (I've been one, ducking the HR folks because I couldn't afford a TIAA-CREF withdrawl from my paycheck... through the first half of the market run-up of the '90s, sadly.)
So once again, the Democrats stand there and say "eat your spinach" and the Republicans sing "Dad is great, give us the chocolate cake." I still don't know what the answer is, but I'm afraid this good idea is probably D.O.A.
Now scroll down a post and play the lyrics meme if you haven't already. Answers on Sunday.