Monday, December 27, 2004

Praise for the "Chilean Model"

from The Social Security Network
José Piñera, Augusto Pinochet's former labor minister, has spent recent years in self-imposed exile at the Cato Institute extolling the virtues of the privatization of Chile's Social Security system. Last week, the New York Times op-ed page allotted him abundant space for his now familiar rap about why the United States should follow Chile's model of pushing workers to depend primarily on personal investment accounts for their retirement income. But notably, he provided no facts or figures about what the upshot has been in Chile since it began privatization in 1981.


Anonymous said...

I had a Chilean model once.

We had a great time that was made even better by the advent of penicillin.

Sheryl said...
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gecko said...

I'm up in the air on privatization of social security. I can tell you that I don't believe the purpose of it was intended to be the sole source of income for old people. Citizens need to prepair for their golden years early or face the chance of having to rely on their relatives or a change of lifestyle.

J.R. Boyd said...

Like any public service, it depends on whether you think it's important. That has a lot to do with one's perspective. Dollar for dollar, some groups gain quite a bit from the program--for instance, the poor, who otherwise might not have an income after their productive years. Of course, if you're already very wealthy, you might come to a different conclusion, since you don't need the service anymore than you need any public service, whether it's public transportation, public education, or public healthcare. As individuals, the rich make their own moral choices about what to do with their wealth--whether they view paying greater taxes as a "badge of pride" as the godfather of capitalism himself, Adam Smith, suggested, or whether they fight tooth and nail to contribute as little as possible, as Smith's modern-day champions strive to accomplish. As institutions incorporated for profit, however, then the choice for weath is clear: raising payroll taxes (in which employers match employees for Social Security and Medicare) is "irresponsible" because it affects profits, while eliminating benefits and raising the retirement age is welcome and wise--it only hurts people.

Now, between the wealth and influence of corporate institutions on the one hand, and everyone else just trying to get by, which perspective do you think is getting more attention in the corporate press, editorial pages, etc? And how do we reconcile this with the current polls showing that most Americans are not in favor of social security "reform"?

gecko said...

Again, I will defer to people with more time to research these things. I can tell you that I have first hand knowledge of the system; my departed brother's wife and children will get a nice payment each month for some years to come.

In the meantime, those with knowledge of the system and the current news trend should decide whether it is in their own best interest to counter with their own editorial pieces (namely, you and Sheryl:)