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| Sunday, January 16, 2005 |
| The British Privatization example |
A conservative government sweeps to power for a second term. It views its victory as a mandate to slash the role of the state. In its first term, this policy objective was met by cutting taxes for the wealthy. Its top priority for its second term is tackling what it views as an enduring vestige of socialism: its system of social insurance for the elderly. Declaring the current program unaffordable in 50 years’ time, the administration proposes the privatization of a portion of old-age benefits. In exchange for giving up some future benefits, workers would get a tax rebate to put into an investment account to save for their own retirement.
George W. Bush’s America in 2005? Think again. The year was 1984, the nation was Britain, the government was that of Margaret Thatcher -- and the results have been a disaster that America is about to emulate.
So starts the wonderful TAP article by Norma Cohen on Britain's privatization of retirement savings. If you are at all interested in the debate on social security, I highly recommend this piece. The gist is that they faced a very simililar situation to ours currently, made similar changes to those Bush is proposing, and have drove the system into a crisis wherein Conservatives in England now think it should be scrapped in favor of... you guessed it.... a system like Social Security in the U.S.
If you don't feel like reading the 5 pages (you should), Paul Krugman offers a summary version in today's Times. And thank God for him for keeping this issue front and center in his columns over the last few months.
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posted by CB @ 10:52 PM   |
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