Streetwise: A market fix for Social Security
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Streetwise: A market fix for Social Security

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The Bush administration would have it that you're either with it or against it on Social Security reform. The Democrats may have fallen for that but Henry Blodget reckons there is a middle way.

The big debate in the US these days is about how to fix the Social Security retirement system. The concern is that, thanks to the surge created by baby-boomer retirements and the general problem of longer life spans, a declining ratio of workers to those in retirement will eventually cripple the programme.

The Bush administration's modus operandi for enacting ideological change is to declare a crisis and propose solutions (Iraq is an obvious example). Today's White House rhetoric, therefore, often implies that Social Security is set to go bankrupt next week instead of simply requiring reduced benefits after an estimated 40 years if it is to be kept from going under.

The administration's fix is a disguised reduction of benefit growth and the creation of voluntary personal retirement accounts. The Democrats' response is to deny the problem, advocate tax increases, and/or to suggest that personal accounts will further bloat the nation's deficit and leave pensioners destitute.

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