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Saturday, December 04, 2004

Social Security: Pay Now or Pay Later

The real economic costs of privatizing Social Security are zero.

The insights in Arnold Kling’s Social Security’s Worn-Out Roof are extremely important to understand if the United States is to escape the deadly clutch of socialism that is now strangling France and Germany.

Arguments that we can’t afford the transition costs to privatize a portion of Social Security are based on faulty understanding of costs and accounting.  Privatizing some part of Social Security by permitting young workers to invest some of their FICA taxes in higher-yielding personal accounts will not add to the costs already mandated by Social Security entitlements.  It will just replace Enron-style, off-the-books liabilities with fully disclosed liabilities so that the public can see more clearly the true costs.

Posted by Thomas E. Brewton on 12/04 at 07:09 PM
Economics • (0) Comments
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