>
>If optimism is at an all time high, couldn't
>that be used to counter the pessimistic
>scenario which is a basis for
>saying the Social Security sky is
>falling and we need to privatize it ?
>
>Charles Brown
>
Yes, but both optimisim and pessimism cut
two ways. Although optimism pushes further
into the future the date on which the trust
fund begins to run a deficit, it also causes
people to salivate over the riches they think
they could gain with individual accounts.
Pessimism reduces confidence in the program, but it does not always carry over to opposition to privatization. I think this is because of the lifeboat mentality I mentioned earlier; if people believe things are going to pot, many think in terms of individual solutions, not collective ones.
On the whole, a market drop may strengthen the anti-privatization case. But don't forget a bad market may still look better than a program people have been told, erroneously, is completely insolvent.
MBS