Wednesday, September 22, 2004
Huh? I'm watching CNN's "Inside Politics" and they're reporting on Sen. John Kerry's promise to do nothing about Social Security's structural flaws and continue down the merry road to destruction.
No, that's not how they're characterizing it, but that's the reality.
Kerry is promising to never privatize Social Security. Fine.
Kerry also was touting a study by a University of Chicago professor, who happens to be an "informal" Kerry advisor, slamming Bush's privatization idea.
But what befuddled me was the following graphic CNN aired:
45% drop in benefits
Cost over ten years to the treasury - 2 trillion dollars
SOURCE: UNIV. OF CHICAGO
Help me out here. If there's a 45 percent drop in benefits being paid out, how does that translate into increased costs of $2 trillion?
*UPDATE* National Review's Ramesh Ponnuru noticed the same thing I did and actually got the report's author on the phone.
The study does indeed find that administrative costs would amount to a huge windfall for Wall Street. Proponents of private accounts are sure to argue that [Study author Austan] Goolsbee's estimate of those costs is too high. But the study says nothing about benefit cuts for current retirees (or even future retirees). Goolsbee tells me he's surprised the campaign is citing him to predict a 45 percent cut for 45 million people. "That's weird," he says. "I don't know how they got that." His paper, he says, didn't deal with benefit levels.
The Kerry campaign's press release can be found here. There are two links on this page to PDF files and it appears that this one has the answers I sought.
It appears as though the Kerry campaign has conflated its own "research" with Goolsbee's and just used Goolsbee's name and executive summary to give it a veneer of scholarly objectivity.