January 16, 2005
That tail-end phrase of a Pet Shop Boys song popped into my head after reading this column by Paul O'Neill in the NY Times.For those to whom the name sounds familiar, Paul O'Neill was our last Secretary of the Treasury, replaced in 2002 by John Snow. His idea is a bold one. Basically he wants every American to have a savings of "at least $1 million" by the time they hit retirement. That sounds pretty nice, but perhaps a little too bold. Given his credentials, it's worth looking at, but it's also important to note the enormous costs to start up such a system. He says, "We did some very rough calculations that showed for $1 trillion, we could transfer the population from age 18 to the mid-30's into this new arrangement.". $1 trillion is a lot of money, but if he can show that sudden debt can be covered (he's a bit vague here) without making everything else suffer, it may be worth it. On one hand, I'm against big government, but on the other, the country would so much better off if this became a reality. It would also allow for government to reduce its size and control in the long run by cutting social programs no longer in need due to common prosperity.
Posted by charr at 11:37 AM
It's an interesting idea. A guy on NPR last Friday was saying that the social security program is not as bad as people are saying it is, and that according to his calculations it would last until 2040 or beyond. It's hard to know who's right.
The S.S. thing has become quite controversial recently. Bush's side is preaching how something needs to be done now, while others say there isn't a big threat. I've heard the 2040 number as well. Truth is, I don't know who's right. I don't think we should wait until the program a complete mess, but I do want to take the right path rather than rushing into things.