The Washington Post recently editorialized on the desirability of reforming Social Security via personal retirement accounts that workers own and control. The scuttlebutt around Washington at the time was that the Post's virtual endorsement of personal accounts could pave the way for Sen. John Kerry to scrap the mindless mantra - "I will never privatize Social Security" - he had been using to dodge saying how he would modernize Social Security and prevent its bankruptcy.
"You'll hear the same rhetoric (from Kerry) you hear every campaign," Bush said. "It is the tired, pathetic way to campaign for the presidency."
I am not surprised that Kerry's risk-adverse advisers from the Brookings Institution, who want to "fix" Social Security by cutting benefits and raising taxes, have probably convinced him the transition costs to personal accounts would explode the deficit. I can imagine that his economic advisers - bean counters right out of the Herbert Hoover school of economic austerity for whom it's deficits uber alles - have imprisoned Kerry in their own cramped and pinched view of the way the world works economically. However, Kerry needs to follow the Post's lead and free himself of men and women of little vision, reaching out instead to economic advisers who share John F. Kennedy's insight that temporary deficits are sometimes necessary to finance policy overhauls that lead to higher long-term growth and greater revenues.
The Post said, "Mr. Bush's sympathizers are right that Social Security privatization could reduce long-term deficits and right that the nation should not be deterred by the transition costs." Personal accounts, the Post went on, "would unlock a new source of money to finance Social Security." Sounding like Ronald Reagan, the Post editorial writers reasoned: "Privatization could also stimulate economic growth, boosting tax revenues and so strengthening the nation's fiscal prospects via a second route." The editorialist observed, "Private accounts would boost national savings" so that "savings would become more plentiful," which, in turn, would "stimulate extra corporate investment and growth."