Privatization Pep Rally

[Max Sawicky]

> >No disagreement there, though the politics
> >of 'zip' are tenuous.
> 
> What position are the unions taking on SS privatization?


The way things are shaping up, the Democrats and
labor are congealing around the position that the
projected budget surpluses should be 'dedicated'
to Social Security, and trying to exploit the
fact of Trust Fund surpluses (which roughly equal
aggregate budget surpluses over the next decade)
being 'threatened' (sic) with tax cuts.

I think this is a very very bad position to
take.  It tends to ratify the non-social
security budget deficit (the "on-budget"
deficit) as a new standard and imply this
deficit should be routinely kept at zero.
This is another way of saying the surpluses
should be placed off-limits to spending,
and that unified budget deficits are
completely out of the question.

The dedication of the budget surpluses to
"save Social Security first" could take the
form of simple debt repayment, or the
trust fund purchase of stock. I'm more
troubled by the assumptions underlying
this policy, then the actual acts of
debt repayment or stock purchase.

While I share your jaundiced view of
the stock purchase idea, it should be
noted that state pension funds are
pre-funded in this way and there is
no overarching political-economic issue
that I can see in that context.  The
individual accounts, a transition to
which would be facilitated by the trust
fund purchase, would be a big deal.

Putting aside the budget issue, labor
would gravitate towards some variation
of the Ball plan, which included a
stock purchase as part of their
solution.

MBS