Catch-22

Paul Krugman proves---let me say that again, proves---that the advocates of Social Security privatization are caught in an a priori fatal error. (Okay, on the off-chance that his math is wrong, I put less than 100% creedence in his argument. But not a lot less.)

The point: The argument for privatization is premised on the notion of an impending fiduciary crisis. It needn't be framed that way---the president and his pro-privatization comrades are free to make a context-independent moral argument for privatization; they just haven't. As we've discussed at some length, the "crisis" is a work of imaginative fiction. But let's assume for the sake of argument that the crisis is for real. For that scenario to obtain, the economy would have to perform so poorly that privatization would only exacerbate the material suffering of penurious retirees.

The bait-and-switch move of the pro-privatization faction is to neatly transition from worst-of-all-worlds economic forecasting as evidence against retaining the current system to best-of-all-worlds forecasting as evidence in favor of adopting a private system. But on their own terms, if the economy performs well enough to make private accounts an truly attractive option, then social security would be on as sound footing as possible.

To sum up: If the privatizers' argument against public Social Security is right, then privatization will make a bad situation worse. If their argument for private accounts is right, then there is no need for private accounts. Next subject, please.