If the stock market's glory days are over, why borrow against the future to invest in a losing gamble?
Assuming the US had privatized Social Security on the first day of the Bush presidency in January 2001, then using the Dow Jones Industrial Average as our yardstick, your hypothetical retirement nest egg would have lost 0.4% over the course of the four years of his first term up until the market's close on Friday. (The Dow Jones Industrial Average opened at 10,587.59 on the first day of Dubya's appointment to the presidency, and closed at 10,543.22 Friday.) A net loss of 0.4% is even worse than the crappy yield you get in a savings account at your neighborhood bank. And, to make matters still worse, we are clearly moving into a period of renewed inflation in which your money will be worth less. Goodbye, life savings!
On the other hand, the Dow Jones Industrial Average opened at 3,255.99 on the first day and closed at 10,587.59 on the last day of the Clinton presidency. Using the index as a broad barometer of the wealth contained in personal investments and 401(k) plans, American assets realized a gain of 325% after the eight years of his administration.
If you want to make a case against Social Security privatization then the pseudo-CEO presidency of George W Bush is Exhibit A, associated as it is with executive entitlements, a rock-solid pattern of incompetence, a total lack of accountability, a history of nonperformance, an oil-industry policy rubber stamp, scandals among his biggest contributors (Enron, Merrill Lynch, etc.), and a dangerously weakened dollar concurrent with higher oil prices.
Maybe the only way privatization could really work is with a Democrat in the White House. That's how wealth is not only more evenly distributed, but properly generated, as recent history shows.
