Gingrich’s Big Ideas

by Ramesh Ponnuru

I write about three of them in this week’s Bloomberg View column.

Gingrich correctly labels as a “fantasy” the notion that [Social Security] can “survive without any structural reforms.” He advocates allowing people to invest some of the funds they currently submit to Social Security in “personal accounts.” . . .

But then comes the Gingrich twist: His plan guarantees that if people’s investments fail, they will still get all the benefits that current law promises them. How can the government save money while giving everyone their promised benefits and making up unlucky or incompetent investors’ shortfalls? It can’t. And won’t those shortfalls be larger if people know they can’t lose?

Plenty of Social Security plans involve the government saving money in the long term by taking a hit in the present. Gingrich has managed to devise a plan that actually increases the program’s long-term cost. The price tag for Gingrich’s originality, based on estimates of similar proposals in years past, would be several trillion dollars.

My thanks to Andrew Biggs of the American Enterprise Institute for walking me through some of the Social Security issues, both for this column and over the years.

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