The online version of the Wall Street Journal is holding a week long mini debate (free to non-subscribers) on how to solve our current economic problems. They have paired two widely recognized economists to represent the different solutions proposed. John Irons representing the liberal side, and Tyler Cowen representing the libertarian side.
The first topic is already posted. It has to do with social security.
What’s interesting about the debate is the fact that they don’t differ much on actual economic policy. Their main differences are philosophical. The libertarian/conservative argues that an individual is able to take care of himself and is responsible for his own actions. The liberal side basically argues that without the government people would not know what to do.
Thats why I take the moderate side in this debate. The libertarian will argue that we should completely abolish social security since its obvious that one can get a better rate of return with that same money invested in some other retirement account. The liberal side will argue that we should keep social security because, even though its true that we can get a better rate of return through some other means, we still have the reality that many people, if given the option, will not invest that money in some other retirement account.
Privatizing social security solves both problems. Private accounts gives those who can invest the money better the option to do so, and forces those that can’t to save.
Of course than you have to get around to how much this will cost, and the regulations behind it. But that seems much less problematic than the solutions proposed, since I don’t think the country would allow for Tyler’s solution. And John’s solution is already expensive as it is.
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