Ownership and Inheritability

On today's Wall Street Journal editorial page, Ed Crane, President of the Cato Institute, asks why Paul Krugman of the New York Times, and by extension all liberal commentators, avoid certain questions when discussing Social Security:

Not once in his rants does he address the issues of ownership and inheritability. Indeed, opponents of personal accounts shy away from those issues like a vampire from the cross.

Crane urges pressing these two points when Social Security reform is discussed. Presumably these are the most salient advantages of personal accounts.

Well, OK, fair enough, let's ask about these questions. Ownership implies control. Who could possibly be against control over one's destiny? Well, the Bush Administration, among many. The people who own personal retirement accounts own all the risk, but will not be able to move money, at will, into the hot stocks of the day. No day-trading with these stocks! The apportionment of money will be stringently regulated. People will be asked to forgo a certain benefit, for a degree of uncertainty, heavy fees, and loss of control. Some great trade that is!

And what's the big deal about inheritability? All new workers have to do to get a certain benefit of some sort is to get Social Security numbers and pay taxes. It's like having a big, extended family concerned about your future! And Congress is absolutely on the hook to get you the money! An inheritance you work for.

Social Security functions as social insurance, not as investment. Are there any insurance programs that you know of that allow your heirs to inherit your policies? If your dad is a doctor, should you inherit his malpractice coverage?

In any event, one can always supplement one's retirement with personal investments.

Meanwhile, Republicans conspire away with various bait-and-switch techniques to break Democratic will:

The emerging Bush-Senate Republican strategy is to entice Democrats into the debate by first focusing on shoring up the system and then selling the private accounts as the smartest way to ease the pain of benefit cuts. All of this relies on Grassley's ability -- and willingness -- to push ahead on an issue some Republicans would rather avoid.

Republicans like Crane should just give up with Social Security "piratization."