Dont' miss Ted Barlow's astute remarks at It's your money.
Bottom line: the more you look at private accounts, the worse they look.
It's a straw man to think that we're going to have one round of reform to improve the system and that's our one shot at it. I expect that we're going to be much more likely to have a salami slicing experience where the first round will grant all sorts of "belt and suspenders" concessions to those afraid of the american people's financial judgment and, when the catastrophes don't happen, one by one, the proven unnecessary safety measures (which will tend to limit improvement) will be dropped, one by one, until we have a system that is much more flexible and the issues addressed in the crooked timber article become relevant.
We're so far away from the scenario posited in the original article that you might as well be debating angelic dance cards (for that grand ball on the head of a pin).
If we just get a basic account system going with bidders to manage it at around the rate the federal employees' pension accounts are managed at with about the same restrictions, we're doing pretty good for a first cut. We're also doing much better than the current system, whether or not it's rejiggered to provide extra solvency with more taxes and/or a later retirement age.
Once we get the basics down and the easy improvements out of the way, we can look to improve beyond that. Now where was that dance card?
Posted by: TM Lutas | Jan 28, 2005 at 11:46 AM