>>>>I should like to draw your attention to an excellent paper by Douglas Arnold, Professor of Politics and Public Affairs at Princeton entitled: "The Politics of Reforming Social Security":
Here is an interesting quote form the above article about the CATO plan:
>>>>Some proponents of privatizing Social Security claim that large majorities of Americans already support full-scale privatization. Michael Tanner reports on a 1996 poll in which 69 percent of registered voters supported a detailed privatization plan while a mere 12 percent opposed it.[31] Although the poll appears to have been professionally administered in terms of sample size and the like, the 200-word description of a privatized system that prefaced the actual question failed to mention transition costs. It summarized all the benefits of privatization, along with "no reduction in benefits for current Social Security recipients," but it neglected to mention the sacrifices required to pay for both systems. Politicians will not be fooled by such nonsense. Polls that emphasize benefits and ignore costs tell us nothing more profound than that everyone likes a free lunch.
Note that Tanner is a co-author of the CATO plan which was the subject of the poll. Arnold is echoing the very problem I find with CATO: less than forthcoming about the drawbacks of their plan. Indeed, CATO supplies Op-Ed pieces to major newspapers asserting that women and the poor are the 'real victims' of the current SS system, when indeed those two groups are the primary beneficiaries of SS benefits formulas today. I am truly puzzled as to why CATO finds it necessary to do that. 'Shooting themselves in the foot' is the expression that comes to mind.
More from Arnold:
>>>>Proponents of advance funding need to be clear and precise about the transition costs. Kotlikoff and Sachs pass this test with ease. In contrast, the Ferrara-Cato plan attempts to show that "the transition can be financed without new taxes and without cutting benefits for today's recipients."[32] The miracle of a costless transition is justified in nearly a dozen ways, my favorite being: "Any remaining transition costs should be financed by cutting other government spending, much of which is wasteful and even counterproductive. Reducing it will not amount to a significant cost."[33] Ferrara has in mind cutting about $60 billion per year.[34] No matter how insignificant he believes these expenditures to be, cutting budgets is never an easy task, especially after the extensive budget cutting of the past decade. It is a mistake to pretend that there are no significant transition costs.
