P-word Controversy

September 11, 2002

Discussion over the word "privatization" has reached news desks, revealing continued discrepancies in definition.

National Review's Ramesh Ponnuru comments that "Privatization is a misleading description of the policy the word is used to describe: letting people invest some portion on their Social Security taxes for themselves."

"When people talk about 'privatizing' schools or prisons, they generally mean contracting out their administration to private-sector companies. Personal accounts, which inject an element of choice into a government program, are not similar to those policies."

Also commenting, The Cincinnati Post argues that "the term [privatization] has been used for years by policy wonks, journalists, and politicians themselves. Though a few congressmen have groused from time to time that it's an inaccurate description, nobody has raised much of a stink… until now."

According to the article, the National Committee to Preserve Social Security and Medicare defines "privatization" this way: "If you are diverting payroll tax money that would otherwise go into the trust fund into these private accounts."

Still, as the Cato Institute's Andrew Biggs' points out, "This debate is a tempest in a teacup: what matters are policies, not the label attached to them. But words influence how people think about issues, and the public deserves to know what personal account proposals actually entail."

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