Herb Stein
2:59 p.m. Friday 7/19/96
Our discussion shows much disagreement among the panelists, some of it quite sharp. But I am more impressed with the agreement that I think I see on these points:
1. Although the Social Security problem may not seem to be right upon us, something needs to be done about it starting now. The conventional political wisdom that Social Security is untouchable is not wisdom but folly.
2. What needs to be done includes some shaving of benefits or some tax increase or some combination.
3. A safety net must be preserved for the retirement of low-wage workers.
4. Some part of the Social Security contributions that in the present system are being invested in Treasury bonds should be invested in private assets. The disagreements are important. They relate to quantities–how much benefit reduction or tax increase, how much safety net, how much diversion of payroll tax revenue to private assets. Some of the disagreement is about whether the investment in private assets should be collectively or individually managed and owned.
My own opinion is that if our policy makers would start with the points of agreement listed above and work out the best deal they can that conforms to these points, we would be far ahead of where we are now. I believe that our panelists have made a valuable contribution to understanding of the Social Security issue and I thank them for the time and thought they have devoted to the discussion.
Next week we will discuss “What is Wall Street Saying?” Our panelists will be:
- James Cramer, business columnist for New York Magazine.
- James Glassman, investment columnist for the Washington Post.
- Robert Litan, director of the economic studies program at the Brookings Institution.
- Robert Shiller, professor of economics at Yale University.
