Fortunately for the Bush Administration, most Americans, including his opponents, have the attention spans of gnats. If this wasn’t the case, a little bit of work and there’d be a lot of screaming about social security privatization.
For those wanting to catch up, read Yglesias on the three distinct phases
The Clawback issue is dealt with by Krugman. Twice
Atrios continues to cover this issue from a technical perspective well, and links to DeLong who suggests the economists at the Council of Economic Advisors are
hacks and that if they were right, it’d be a good time to move out of stocks.
I was going to copy some of my lecture notes from a class I’ve taught in the past on the American Welfare State (such that it is) to explain the basics of social security, but Atrios does it fine here. It’s clear and I can’t improve upon it–especially since my notes are just that.
There is a problem with the Social Security system, but there is no crisis. The problem can be fixed in two ways. One is to reduce benefits and the other is to increase taxes. Trying to sell half ass non-plan as a free lunch is silly. It is in fact a lowering of benefits. Bush tries to sell it as an increase in the chance you’ll do better and strictly speaking that is true, but when one gets a higher chance at risk with the same cost, that’s a loss of value and effectively that is what this plan delivers by forcing you to utilize the same percentage of your income while increasing the risk. Make no mistake about this, on the face of this, this is a cut in benefits.