This morning, the Employee Benefit Research Institute (EBRI) will release yet another in a series of studies describing supposed logistic obstacles to privatizing Social Security. This one will discuss administrative costs and related issues. If you see the EBRI study, you'll want to consider these observations from the Cato Institute's director of health and welfare studies, Michael Tanner:
"Will it cost more to administer a privatized Social Security system than the current program? Very likely. A Mercedes Benz costs more than a Ford Pinto. The important question is which system will give seniors a more secure retirement. A privatized system clearly does that.
"In 1935, when the Social Security system was developed, only 20 percent of American households had telephones, few had televisions and none had computers, but the federal government managed to administer the new program. It is impossible to anticipate the technology of the future. EBRI's assumptions are based on an unrealistically pessimistic prediction of future capability.
"Moreover, EBRI clearly overstates the cost of administering a privatized system. A forthcoming Cato study by Robert Genetski, former chief economist at Harris Bank and now director of resources and asset management at Chicago Capital, will show that administrative costs in a privatized system will likely be less than $20 per person per year."
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"Thursday's staff report 'does a terrific job of setting out both the stick and the carrot: the stick in the form of the financial crisis and the carrot in the form of a better Social Security system,' said Michael Tanner, director of the Social Security Privatization Project at the Cato Institute, a libertarian think tank that has strongly influenced the Bush administration's work in this area." - Los Angeles Times |
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