DAILY SUMMARY April 23

[National Dialogue Moderator <moderator>]

DAILY SUMMARY FOR APRIL 23, 1999


During the fifth day of the dialogue the participants primarily
debated the pros and cons of privatization and what values such
schemes would protect. Many had strong reservations about making
such a radical change away from the present social insurance scheme.
Others suggested that the values reflected in both approaches should
be synthesized.

The critics of privatization focused on several flaws that they
saw in these types of proposals.  One characterized the privatizers
as saying "I've got mine and I want the government out of my hair."
Others saw their lack of knowledge of the stock market as severely
handicapping their ability to provide for a secure retirement.
Others focused on the risk of making foolish investments and the
potential for fraud and bribery.

In responding, the privatizers took two different tacks.  One set
said that investing in mutual funds or government bonds should
provide a safe and secure nest egg for those not interested in more
speculative investments.  A second group adopted a more sink or
swim approach - that the way to learn was to do it.  The privatizers
also split on whether investing in private accounts should be
mandatory.

Imposing benefit cuts on wealthy seniors was also advocated. In
arguing for the equities of this approach one participant pointed
out that the census data from 1973-1997 shows that real median
incomes have declined for those under 45 as compared to those over
65. Therefore he felt that the wealthier retirees should make more
of the sacrifices to ensure the system's solvency.

Those who think that a successful reform should be a synthesis of
the two approaches thought that such a combination could increase
the national savings rate.

Another participant advocated using the surplus to fund national
investments in education and infrastructure thereby increasing
overall retirement revenues.