Social Security 'Transition Costs' a Myth, Say Economists
By Jeff Johnson
(CNSNews.com) - Transition costs, trumpeted by Democrats as a chief reason not to support President Bush's Social Security reforms, are a myth, according to several prominent economists, including the 2004 Nobel Prize winner.
The trillion dollar totals that Democrats cite as "transition costs" are actually the amount the government is borrowing to pay current Social Security benefits combined with the massive debt already owed to the so-called Social Security "Trust Fund."
"We hear a lot about transition costs," Arizona State University professor Edward Prescott, 2004 winner of the Bank of Sweden Nobel Prize in Economics, said. "But I'm going to use some economic jargon, not 'political accounting' jargon.
"There are no transition costs," Prescott said at the Cato Institute Feb, 9. "Re-labeling debt is not a cost."
posted by Brent Metzler at
6:12 AM
2 Comments:
Still sounds like a bad idea when you do the math. Read the analysis from the Oregonian. Plus, why is the Bush administration dragging its feet on releasing information about the money it is spending on promoting this Social Security "crisis"? They've already missed a deadline.
By
Anonymous, at 4:24 PM
Even the Oregonian says that 40+ yo's are already experiencing impacts to their social security benefits. So when do you cut your losses and reform a system to do better? Now, or wait until it gets worse?
I know how I feel. It's gotten bad enough. It's time to cut our losses and secure Social Security so that I (and other young Americans) will get the retirement benefits that have been worked so hard for, and we will not have to damage the social security safety net.
I want to improve social security before it gets worse, not wait until it is too late.
-Brent
By
Brent Metzler, at 5:50 PM
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