The Social Security debate compels the Earnest Prof to take a break from his break and re-write history:
...the politics of privatization depend crucially on convincing the public that the system is in imminent danger of collapse, that we must destroy Social Security in order to save it.
...since the politics of privatization depend on convincing the public that there is a Social Security crisis, the privatizers have done their best to invent one.
Oh, it was privatizers on the right that invented the Social Security crisis? Then when Bill Clinton insisted in his State of the Union that we "Save Social Security first", what was that about? And why did Al Gore keep going on (and on,and on) about his "lockbox"?
We all know the answer - Back in the era of budget surpluses Social Security was in a crisis discovered by Bill Clinton so that no one could cut taxes until Social Security was "saved". Well, Republicans (with some Democratic votes) cut taxes without saving Social Security, but the public perception of crisis lingers.
Bill Clinton started this fire, but it was George Bush who brought the hotdogs and marshmallows. My Metaphor-Mixer is pointing towards "Reap what you sow".
UPDATE. Surprise, surprise - it wasn't just Clinton and Gore sounding the alarm. Try and guess what well-known (and once well-regarded)economics writer used the phrases "Ponzi game" and "crisis ahead" when writing about Social Security back in the 90's?
Well hey, a guy can change his mind. Back in 1996, when Bob Dole was campaigning on a tax cut, the long term federal deficit was in "serious trouble", and the US had demographics that were "devastating". Social Security was no longer a crisis in 2001, when the Bush Commission was contemplating private accounts; it became part of a long term solvency crisis again (briefly) in 2003, when Bush's second round of tax cuts were being mooted; and, based on the current column, the Social Security crisis has passed us by. Whew!
Now, future fun alert - next summer, Bush may be pushing both tax cuts and Social Security reform. Since Krugman has two columns a week, maybe Social Security will be in crisis on Tuesdays, but fundamentally sound on Fridays. I can hardly wait.
UPDATE 2: Hmm, I learn from Dean Baker that [i]n their 1998 Report the Trustees of the Social Security System project that over the next seventy-five years the U.S. economy will grow at an annual rate of 1.4%, less than half the rate of growth of the past seventy-five years.
These gloomy (or conservative) forecasts under Clinton cpresumably helped promote a sense of crisis, which certainly worked for Clinton, as noted above. However, as Dean Baker observes, if the economy is going to perform that poorly, who would expect the stock market to perform well?
Fair enough. And we are back to aphorisms now - the real issue is, how do we best grow the economy over the next fifty years? Arguments about how to slice the pie should follow an agreement about how best to bake it.
I need to dig up some pro-privatization rhetoric - my guess is that there will be some material for the compost heap readily available. I say that because (IMHO) people focus on actuarial details and slide right by the the real reason for privatization.
The secret is hiding in plain sight, of course - it is Bush's push for an ownership society. Make people capitalists; then get them to vote like capitalists. Some Dems oppose this for the same reason that union organizers don't like employee stock ownership plans - it is harder to promote an "us-them" divide when we are they.
UPDATE: Krugman supporters (led by commenter JS) are staging a bit of a rally - In 1997, Krugman disavowed his 1996 book review fretting about Social Security that was linked above. The real problem is Medicare, not Social Security.
Hmph. In the 2003 column (also linked above) mentions Social Security and Medicare as problems. If everyone else is publicly worrying about Social Security, and he does so in his own column, don't come back later and tell me he "really" meant that the problem was mostly Medicare. He chose to exploit the popular fears at the time, and we are going to mock him now.