Insightful Analysis From Overseas

Here's how one German paper (FAZ--yes, I'm catching up on what the German press is up to) says about Bush's Social Security plans:

"The Democrats will close ranks against him and, under the banner of Roosevelt Socialism, they will begin an anti-Bush march."

How dare that crazy Bush upset the delicate alliance the Democrats have forged.

And there's more! Handelsblatt chimes in:

"The worst part," says the paper, "is that in trying to push through America's greatest social reform in 70 years, Bush is not telling the full truth." While Bush has promised that those who opt for the privatized system will get as much or more than in the old system (6.5 percent returns), the only way he can deliver is if the stock market grows considerably, says the paper. "The American people would therefore not only be in charge of their own retirement accounts, they would also personally live with the risk."

Note that taking personal responsibility for one's savings and future is completely foreign, and in fact, reprehensible, to Europeans. In twenty years when they have one worker propping up the welfare of every three to four retirees, they may have to re-think their position. Of course, by then it will be too late.

Sueddeutsche Zeitung, in my opinion, gets it right:

"Bush does not want to be a faceless manipulator of power, rather he aspires to something greater: He sees himself as a revolutionary who wants to turn his nation inside out and change the world." In his State of the Union address, Bush showed the hard-nosed self assurance that has characterized his administration all along, the paper writes, and he showed no signs he would give in, either to Democrats or to world opinion. "According to Bush, America is the land of dreams. And he is determined to dream his dreams to the end -- either until they become reality or until he wakes up in a fever." The stakes Bush is laying out are very high, the paper insists. "If Bush fails, the failure will be enormous. And if he is successful, he will be remembered as one of the most important presidents in history."

I may have to make this a regular TGOM feature.

UPDATE: I thought something stunk when I was posting this last night. Looking back, the Handelsblatt excerpt cites a 6.5 rate of return for Social Security in its present state. I had read this Donald Luskin piece earlier in the day excoriating Krugman, which uses 3% as its supposition. The Heritage Foundation is even less generous:

Social Security's inflation-adjusted rate of return is only 1.23 percent for an average household of two 30-year-old earners with children in which each parent made just under $26,000 in 1996.1 Such couples will pay a total of about $320,000 in Social Security taxes over their lifetime (including employer payments) and can expect to receive benefits of about $450,000 (in 1997 dollars, before applicable taxes) after retiring at age 67, the retirement age when they are eligible for full Social Security Old-Age benefits.

Reading this, it appears that the 6.5% is a figure which comes from the Social Security Administration itself.

For me, it is a simple distinction between the government confiscating my money with a flimsy promise on some financial return when I retire (and nothing if I die before then) versus some control and responsibility over what is, after all, MY money. And that is what makes the case for privatization compelling.