No Transition Costs

On Social Security: The Washington Post Gets It
Jack Kemp
http://techcentralstation.com/120904C.html

Jack Kemp reports on the growing bipartisan push for Social Security reform, from the Washington Post…

For example, on August 14th, 2004, the Post editorialized that, “Mr. Bush’s sympathizers are right that Social Security privatization could reduce long-term deficits, and right that the nation should not be deterred by the transition costs.” The Post also discarded the class-warfare mantra that has consumed Democratic candidates and party loyalists for so long by reasoning that: “Privatization could also stimulate economic growth, boosting tax revenues and so strengthening the nation’s fiscal prospects via a second route.” They continued, “Private accounts would boost national savings” thus “savings would become more plentiful,” which, in turn, would “stimulate extra corporate investment and growth.”

The Washington Post editorial writers realize that Social Security, as it currently stands, is the “risky scheme.” The government can at any time raise taxes or cut benefits. Moreover, workers born after 1960 are expected to receive a real rate of return on their payroll-tax contributions of less than two percent. Alan Greenspan stated this in 1999; his estimate likely was generous. This measly return is not a fair deal for retirees — today or in the future — and is particularly bad for low-income people of color. Even workers who put their money in standard government-insured savings accounts will earn higher returns than the current Social Security system can provide.

The Washington Post has now followed up on that original piece with an even more promising editorial this week. This week’s piece entitled, “The Cost of Reform,” observed that creating personal retirement accounts without tax increases or benefit cuts would require “issuing perhaps $2 trillion in extra bonds over the next generation or so,” but added that the creation of these accounts “would generate an equal and opposing transition benefit” thus “the net transition cost should be zero.” Ditto for the effect on interest rates and the dollar. As the editorial makes perfectly clear, “Government borrowing would increase, but private saving would increase equally.” In other words, net national savings would not suffer. In fact, net national savings can be expected to increase, especially if personal accounts are accompanied by tax reforms.

Hat tip Tech Central Station

Helping the Terrorists

Over at the Corner

OVER THE BORDER [KJL]
And then there is the illegal immigration thing in Spanglish. The housekeeper (Vega) comes to America with her young daughter “economy class…”—they run across the Mexican border. And what does she do? Works her tail off, four jobs for $400-something a week I think her daughter narrator says at one point. Hardworking, decent, wonderful people are many of the illegals in the country. Totally the way W sees it. And totally true in so many cases…they just want the best for their families. It’s a single mother in this case whose husband inexplicably left her, as they do sometimes do.

But, of course, they’re still illegal…and if we’re not cracking down on her, we’re also not cracking down at the guy who wants to do us harm at a time when there is an active jihad being waged against us, among other things…

Meanwhile,

Homeland Security pick withdraws name
WASHINGTON — In a surprise move, former New York Police Commissioner Bernard Kerik abruptly withdrew his nomination as President Bush’s choice to be homeland security secretary Friday night, saying questions have arisen about the immigration status of a housekeeper and nanny he employed.

The common theme? United States federal policy supports terrorism.

In the first post, a fictionalization of a single mother working three jobs. Three jobs in the black market, because even though she wants to work, and employers want to hire her — even though there is work to do — our immigration policy hasn’t caught up to the fact.

In the second, the Homeland Security Secretary-designate withdraws his name over where or not a nanny paid taxes. Our top domestic opponent of Al Qaeda can’t work because of a nanny.

This is absurd. There is work to do, and immigrants want to work. We should expand legal immigration, reap the benefits of a growing economy, shrink the black market, and let our top fighters against Al Qaeda do their job.

Support working families. Kill terrorists. Reform U.S. immigration policies.

Update Powerline disagrees.

Democracy in Action

Iraq’s Odd man out?
The political currents are running against U.S.-backed Prime Minister Ayad Allawi
Kevin Whitelaw
U.S. News and World Report
December 12, 2004 Edition
http://www.usnews.com/usnews/issue/041220/usnews/20iraq.htm

Even as insurgent violence in Iraq continues to increase, U.S. officials have been reassured by the stalwart presence of Iraqi Prime Minister Ayad Allawi. But now, with the January 30 election fast approaching, there is an increasing realization in Washington that the administration’s key ally may not be in his job that much longer. In fact, U.S. News has learned that at a meeting two weeks ago, top Bush cabinet officials including Secretary of State Colin Powell and Defense Secretary Donald Rumsfeld discussed the prospect that Allawi might lose his job following next month’s parliamentary poll.
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In recent weeks, most observers have been more focused on whether the elections will even take place–and many politicians continue to fear that insurgents will target electoral workers and polling stations in an effort to disrupt the vote. But President Bush and the interim government continue to insist they will stick to the schedule. This means that time is running out for Allawi, whose efforts to fashion a unity slate of candidates to return him to his post have foundered. Most political observers now say that he is unlikely to be chosen to keep his job because many Iraqis believe he has failed to deliver on promises to improve security or deliver basic services.

Prime Minister Allawi (“No, Allow Me”) seems like a great man. He is unbelievably heroic for leading his nation at this desperate time. But even greater and more heroic is the new free Iraq. The identity of the next leader of Iraq matters much less than how he is chosen. May a free Iraqi people have a leader of their choosing, Inshallah.

Allawi, a secular Shiite, could still prevail, but it is not clear that the U.S. military is fully prepared for his increasingly likely departure. Allawi has given U.S. troops a fair amount of room to operate in Iraq–and backed them even during tough times like the siege of Fallujah. On the other hand, the ouster of the U.S.-backed Allawi could help convince Iraqis that the United States really is trying to build a democracy in Iraq.

Yup.

Hat tip Democratic Underground.