Again, With Pictures

Yesterday, writing about Social Security, I said: "the cost of doing nothing at all is less than the cost of Bush's plan." Now, thanks to Kevin Drum, we have some visual aids to help drive this point home.

Drum also looks at the original data from the CBO on the impact that private accounts will have on the bottom line for retirees, and concludes:

Private accounts still aren't as good as simply doing nothing. And this is despite the fact that this analysis stacks the deck in favor of private accounts by assuming stock market returns of 6.8% and total portfolio returns of 5.2%. That's pretty bullish.

These numbers illustrate the serious contradiction that privatization advocates face: they need to say that the economy will underperform over the next several decades in order to argue that the existing program is in "crisis", but they need to say that the economy will overperform over that same time period in order to claim that private accounts will have yields high enough to compensate for the benefit cuts they have proposed. They can't have it both ways, although expect to see the Administration try to over the next several months as the debate heats up.