Social Security transition costs will be hundred of billions to trillionsDid a majority of Americans vote in November to increase the national debt by $1 trillion? Probably not. But that is likely where we are headed. President Bush has made clear that his top aim is to revise Social Security, including the creation of personal accounts.
While the White House has not said how it will pay for the transition from the conventional Social Security system to one in which Americans could invest their accounts in the stock market or mutual funds, the common assumption among proponents is that the set-up costs would run in the hundreds of billions to trillions of dollars over a decade.
It will be important that Congress subject the implementation of such a concept to rigorous debate. But that is hardly a sure thing. One-party government doesn't allow for the skeptical point of view.
Creating private Social Security accounts would be a gigantic financial boon to Wall Street. In a decade that has exposed illegal Wall Street activities that have screwed average shareholders, this is a curious judgment by Congress.
Some lawmakers seem eager to create one more deregulated marketplace in which average Americans may lose their shirts.
As Federal Reserve Chairman Alan Greenspan said recently, the federal deficit is reaching the point of alarm. We already have an expensive foreign war as well as a large debt from tax cuts. These Social Security transition costs may well break the bank.