Wednesday, January 11, 2006

Privatize This

I'm always skeptical of Republican claims of success: The economy is great for everyone, Rumsfeld is doing a heckuva job in Iraq, etc. If you remember back to the Social Security debate, the Chilean pension system was touted as a raging success of privatization. Too bad that not even the conservative presidential candidate from Chile believes that:
"Chile's social security system requires deep reforms in all sectors, because half of Chileans have no pension coverage, and of those who do, 40 percent are going to find it hard to reach the minimum level," Mr. PiƱera [the conservative presidential candidate] said in a televised debate with Ms. Bachelet on Wednesday.
What younger Americans should pay attention to is how the changing economy will effect them under a Social Security privatization scheme:
But skeptics point to another developing problem: many young people, who should be enrolling in the system early to accrue maximum benefit, are staying out or paying in very little. Some cannot afford to contribute beyond the obligatory minimum payment, which is 10 percent of wages, while others are either self-employed or have been hired by companies as low-paid independent contract workers and therefore do not have to contribute at all.
If the GOP retains Congress in '06, expect this to be resurrected and pushed through. There will be a lot of pressure on Bush to do something big.


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