Thursday, June 11, 1998

Support grows to privatize Social Security

All of a sudden, an idea that seemed to have virtually no support -- privatizing some portion of Social Security -- has support everywhere you look.

If you had wandered into a recent hearing of a House Ways and Means subcommittee, for instance, you would have heard several economists testifying, and you would have noticed that everyone of them favored the establishment of individual retirement accounts.

But you might have noticed, too, that a persistent question keeps repeating itself -- whether plans to invest in stocks and bonds will be as safe as the current program. Alicia Munnell, formerly on President Clinton's Council of Economic Advisers, said, well, sure, private accounts make sense. But she also argued for increased benefits and said any reform should afford recipients as much protection as they get now.

Such assurances can be easily made. The government can promise it will make sure that, if an investment does not return at least as much as a recipient would have received from Social Security upon retirement, it will make up the difference. Those who have worked out the mathematical probabilities say it's a near certainty that the government would seldom, if ever, have to fork over a cent, at least if the new program was set up with reasonable forethought.

Most people would get far more under a privatized system than under the present system. In fact, people with relatively low incomes could accumulate real wealth.

Despite the ideological wailing of a few, the proposal to privatize Social Security in some fashion is gaining momentum. One reason for that is evident. It's a sound, well-considered proposal, and there's an answer for virtually any question that gets asked about it.