Monday, February 21, 2005

An "E" For Effort

Powerline's John H. Hinderaker makes a sporting effort to mislead his readers about the nature of Bush's social security proposal in this post, but makes the fateful mistake of linking to an article from the Washington Post that contains actual facts. Hinderaker writes:

I'm one of the worst investors in the history of the world, and every decision I make about stocks turns out to be wrong. But, you know what? I still do far better saving for myself than I could ever do through Social Security. But that's OK, because the one fact that the Post somehow avoids mentioning is that the Bush administration's private account plan is entirely voluntary. That's right: If you're convinced that every investment you will ever make, no matter how conservative, will somehow turn out worse than burying cash in your back yard, not to worry: you can stay with the good old, impossibly lame, Social Security program forever.

This is a complete mischaracterization of the President's Social Security plan. Hinderaker makes it seem as if private accounts are a cost-free bonus that mean-spirited Democrats and America hating liberals are opposed to. What he completely ignores is the rather important point is that these private accounts are not cost free. Since these accounts would come from payroll taxes, they would weaken the entire social security system. Furthermore, to pay for the accounts the guaranteed benefits of the "good old, impossibly lame Social Security program" would be cut. As the Post notes:

Bush envisions the personal accounts generating enough profit from investments in stocks and bonds to offset future reductions in guaranteed benefits.

So, according to George W. Bush, the way to avoid having your living standards lowered by his plan is to invest in a personal account and hope that your investments work out. Yeah, that sounds pretty voluntary to me.

Not only does Hinderaker not bother with getting the facts of Bush's Social Security proposal right, but he also did not bother reading the article he linked to carefully. In an update to his original post he says:

Several readers have pointed out that, in its next to the last paragraph, the article does quote a White House official saying that "'no one is exposed to risk that does not want any risk' because the program is voluntary." But the rest of the article is premised on the idea that workers will be forced to assume risk...

Hopefully in the near future he will add another correction that recognizes the fact that Bush's program actually basically does force workers to assume more risk. If the Fearless Leader is willing to acknowledge this, why can't Hinderaker?


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