It seems to be my favorite topic lately. Today, an exasperated Matthew Hoy reviews the latest Paul Krugman article on Social Security and writes: “I've largely stopped bashing Krugman for two reasons. First, he so seldom writes anything original anymore -- he's got about four different columns and all he does is move a few of the words around.”
Ain’t that the truth. One of Krugman’s most tiresome tropes is to compare American economic policies with Argentina, as if anything we do remotely similar to that country will lead to the dusty collapse of the American dream. It’s all the more duplicitous because Krugman conveniently ignores the spectacular success story found in Argentina’s neighbor, Chile. In the early 1980’s, Chile instituted personal savings accounts to replace their creaky public pension system. Today, it stands as a testament to the power of “ownership, choice and personal responsibility” in the words of Jose Pinera, who was the head honcho in Chile for the transition.
When the system was inaugurated, one-fourth of the eligible work force signed up in the first month. Today 95 percent of covered workers participate. For Chileans, their retirement accounts represent real property rights. Indeed, the accounts, not risky government promises, are the primary sources of security for retirement, and the typical Chilean worker's main asset is not his used car or even his small house (probably still mortgaged) but the capital in his retirement account.“Freedom”? “Choice”? Krugman and the Dems shiver and recoil at such heresy. Ironically, Krugman titles today’s screed “Borrow, Speculate and Hope” which is the best case scenario for Social Security. If we do nothing, you can bet your bottom FICA dollar that the future will be “Slashed benefits, massive taxes, and despair.”
Since they have a personal stake in the economy, workers cheer the stock market's surges rather than resenting them, and know that bad economic policies will harm retirement benefits. When workers feel that they themselves own a part of their country's wealth, they became participants and supporters of a free market and a free society.