< meta name="DC.Date.Valid.End" content="20050825"> Amendment Nine: Paging The A9 Auditors

Friday, February 04, 2005

Paging The A9 Auditors

Ok guys...now that we have the Bush Social Security reform plan to analyze, I think it's time for Amendment Nine's crew of finance folks to put on the green eye shades.

My initial un-educated take? So we've got this BIG crisis. Bush has this BIG idea to fix it - private accounts. But it turns out, on their own admission, that the BIG idea is actually a zero sum game vis a vis the BIG crisis. It solves nothing, costs a whole lot, and puts people's retirement at risk.

Paul Krugman had a good analysis, calling it essentially a giant stock speculation on margin. I've always been skeptical of the lefty talking points on this, namely, that such a plan only benefits Wall Street stockbrokers. But it sounds like this is actually the case.

Worse yet, how much of this historically enormous margin purchase will eventually face margin calls...and if so...then what? Is this the worst idea in the history of public finance?