Lindsey: Reform Worth Borrowing For
August 27, 2002
Sunday's Washington Times reports that White House economic advisor Lawrence Lindsey supports transitioning to individual retirement accounts even if it involves initial borrowing. The current system will cost over $4 trillion to sustain over the next 75 years, Lindsey says, but a modernized system that allows workers to invest a portion of their Social Security tax, has a short-term transition cost of up to $1 trillion (In fact, proposals from the President's Commission had lower upfront costs). Lindsey acknowledges the cost of introducing individual accounts, but argues that it would save the government much more over the long run. Excerpts follow:
"What you have to do is remember you're making the government better off by $4 trillion over time… If you can improve … the balance sheet of the federal government by $4 trillion, there's no trouble temporarily borrowing money to do that." "It makes even more sense to do it. Because the bottom line, from what the commission said, is that right now we have an actuarial hole in Social Security of something like $4 trillion. The plan the commission recommended would eliminate that hole, meaning the fiscal position of the United States would be better off by $4 trillion … than it is now." "…if we don't make any changes, sometime in the 2030's every American on Social Security is going to get a 30 percent cut in their benefits … I think that is wrong. I think we have to do something to stop it, and the best time to stop it is now."
2005 Index |
2004 Index
2003 Index |
2002 Index |
2001 Index
2000 Index |
1999 Index |
1998 Index
|
